by Tim McLaughlin, Sr. Vice President, Weichert Financial
The U.S. added a seasonally adjusted 115,000 jobs in April, the government said Friday, as private employers added 130,000 jobs. The unemployment rate ticked down to 8.1%, the lowest rate since January, 2009.
Some of the slowdown may have been the result of an unusually warm winter, which likely caused some companies to hire workers earlier in the year than they otherwise would have. Indeed, the Labor Department revised upward its estimates for job growth in February and March by a combined 53,000 jobs. With the revisions, the U.S. has added an average of just over 200,000 jobs per month over the past four months, a marked improvement from last summer, when job growth nearly stalled out.
The jobs report likely won’t change the Fed’s stance on QE3. Market watchers say at least one more jobs report and maybe another GDP number are needed before the Bernanke and the Fed decide their next move.
Other signs have been more encouraging. A measure of manufacturing activity this week showed the fastest pace of growth in nearly a year, and layoffs slowed last week after picking up earlier this spring.
“We interpret this as consolidation, not the start of a prolonged slowdown,” said Jay Feldman, economist at Credit Suisse. “Job growth ran too far too fast ahead of private sector final demand for a period of time, perhaps due to the warmest winter in a century, and is now coming back to earth.”
Federal Reserve officials have said that they expect only gradual improvement in the labor market the rest of this year. The Fed last week forecast that the unemployment rate would fall to somewhere between 7.8% and 8.0% by the end of 2012.
If the labor market stalls, the Fed could reconsider measures to stimulate the economy. “If unemployment looks like it’s no longer making progress, that will be an important consideration in thinking about policy options,” Fed Chairman Ben Bernanke said last week.
Friday’s report showed that private companies again fueled the growth, adding 130,000 jobs in April. Governments, meanwhile, cut payrolls by 15,000.