Companies cranked up hiring in April to the fastest pace in five years, easing fears that a recent lull in economic growth would mean fewer new jobs.
The government snapshot of the labor market showed the U.S. created 244,000 jobs in April. The private sector added 268,000 positions—the largest jump since 2006—offset by continued cuts at all levels of government. Most economists saw the month's strong job gains as confirmation that a recent slowdown in the economic expansion was likely temporary and that growth will pick up.
The report cheered investors and helped ease worries of a slowdown that sparked a selloff in commodities earlier this week. The Dow Jones Industrial Average rose 54.57 Friday, to close at 12638.74.
Even with strong hiring, the unemployment rate rose to 9% from 8.8% in March and remains stubbornly high. This apparent contradiction results from the Labor Department's two surveys—one of employers and one of households. The household tally, a smaller sample, is used to calculate the jobless rate. Over time, the results of the two surveys tend to converge, but in some months they move in opposite directions.
The jobless rate's climb in April isn't due, as it sometimes is, to more people rejoining the work force. Instead, the benchmark rose because the household survey found fewer people with jobs, including a sharp drop in farm and self-employed workers.
Friday's report appears to be in line with the Federal Reserve's view: The economy is growing fast enough to produce steady but unspectacular job growth that won't bring the unemployment rate down quickly. Before the report, many Fed officials were doubtful that the pace of unemployment improvements—the rate fell from 9.8% in November to 8.8% in March—could be sustained.
The Fed plans to end a $600 billion Treasury bond-buying program in June and keep short-term interest rates near zero for a while. Friday's report is unlikely to change that course.
Polar Corp. is among the companies on a hiring spree. "White-hot growth" in orders for the company's tank trailers, which ferry goods such as sand, flour and chemicals, and expansions to the network of centers to service those trailers, have led to a burst of hiring this year, said Ted Fick, Polar's president and chief executive.
A nine-to-10-month order backlog, compared with two-month backlogs a year ago, is pushing the St. Cloud, Minn., company to ramp up manufacturing. Meanwhile, Polar opened another 11 service centers in the past year and plans to open more in the next 12 months. "The future's bright," Mr. Fick said. "It's not very often that you see things snap back this quickly."
The company has added roughly 600 employees in the past nine months, hiring about 100 of them in April. Mr. Fick said he expects to add 75 more workers in May.
Opinion Journal
Columnist Mary Anastasia O'Grady says it's time for the President to stop scaring business.
So far this year, the economy has added 768,000 jobs and the Labor Department revised up the prior two months to show job gains were stronger by a total of 46,000.
Still, the economy has a massive jobs hole to fill. As of April, there were 13.7 million Americans out of work and another 8.6 million who wanted to work full-time but could only find part-time jobs.
President Barack Obama, speaking in Indianapolis, said: "There are always going to be some ups and downs like these as we come out of a recession, and there will undoubtedly be some more challenges ahead. But the fact is that we are still making progress."
The White House has projected that unemployment would fall steadily over 2011 and 2012, hitting 8.2% by November, 2012. But job creation so far this year has been stronger than the government predicted, and private-sector analysts are forecasting unemployment to drop below 8% by Election Day.
House Republicans said that Democratic policies were prolonging economic uncertainty and inhibiting private-sector growth. "While any improvement is welcome news, job growth in America is still nowhere close to what it should be," House Speaker John Boehner (R., Ohio) said in a statement.
Employment gains last month were broad-based, ranging from strong factory hiring to a surge in service-sector jobs. Retailers hired 57,100 people last month, in an indication that rising costs for gas and groceries haven't damped Americans' appetite for other kinds of shopping. Manufacturers added 29,000 jobs, while professional and business services notched 51,000 employees. Even construction, which has trailed in the recovery, boosted payrolls by 5,000.
YRC Worldwide Inc., of Overland Park, Kan., improved its efficiency during the downturn. When business started to pick up, the transport company opted to pay workers overtime, rather than take on new hires. But a sustained increase in business volume has prompted YRC Worldwide to start recalling laid-off workers and hiring new ones. It has added dock workers, drivers, service representatives and engineers. The company, with a total work force of 25,000, called back about 500 workers in the past month and hired 50 employees.
"It's gratifying to be on our toes and in a hiring mode rather than on our heels and in a retrenchment mode," said James Kissinger, an executive vice president and chief administrative officer at YRC Worldwide.
The combination of job growth and a slight increase in average hourly earnings for private-sector workers should support consumer incomes, which is particularly important amid rising food and energy prices. Average hourly earnings for private workers rose by three cents, or 0.1%, to $22.95 in April. In the past 12 months, average hourly pay was up 1.9%. The average workweek for private, nonfarm employees was flat at 34.3 hours in April.
Government was the only sector to shed jobs last month, cutting 24,000 workers—continuing a trend that has created bleak job prospects for workers like Mary Favorite. Ms. Favorite was laid off in August as a parent adviser at a Jefferson Parish, La., middle school. "I've checked with various schools, but they're not hiring," she said.
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