A surprisingly strong April jobs report Friday obliterated forecasts of weak job growth and spurred the stock market to surge.
The U.S. Bureau of Labor Statistics said Friday morning that U.S. employers added 165,000 nonfarm jobs last month. The unemployment rate dipped to a four-year low of 7.5 percent.
The labor department also revised upward March’s dismal estimate of 88,000 new jobs to 138,000.
The stock market took off as soon as trading started for the day. The Dow Jones industrial average climbed above 15,000 for the first time ever before closing up 142.38 points at a record 14,973.
The Standard and Poor’s 500 index closed at 1,614.42, up 16.83 points. That’s the first time the index has closed above 1,600.
The Nasdaq rose 38.01 points to close at 3,378.63, its best finish since late 2000.
“This was like a breath of fresh air,” said Barry James, president of James Investment Research Inc. of Xenia.
The jobs report and stock market rally were the latest positive news from a recent string of strong economic reports.
Initial jobless claims last week dropped to a five-year low. New home sales also have risen, and auto sales have been strong.
Taken together, the data suggest the economic recovery does not appear to be losing steam, as some experts feared.
“This tells us that the economy is recovering fitfully, and even the data is behaving fitfully — first, worse than thought, and then better than thought,” said James Brock, professor of economics at Miami University. “I think it tells us things are getting better, but they are not where we would like them to be.”
But the economy’s recovery needs to accelerate to make a significant dent in the large pool of unemployed workers. Employment in Ohio fell last month, and sequestration could lead to significant payroll cuts in the region.
“Job growth in Ohio has stagnated completely,” said Richard Stock, director of the University of Dayton Business Research Group.
The largest gains in jobs occurred in professional and business services (+73,000 jobs), leisure and hospitality (+43,000), retail trade (+29,300) and education and health services (+28,000).
The largest losses occurred in government (-11,000 jobs), information (-9,000), and goods-producing industries, such as mining and construction (-9,000 in total).
U.S. payroll growth was better than expected.
Earlier this week, a survey of economists by Bloomberg projected that employers added only 148,000 jobs in April, which would be short of the 150,000 new jobs needed each month to keep up with population growth and immigration.
But perhaps the best news was that the U.S. Bureau of Labor Statistics revised its employment estimates for February and March.
Instead of adding only 88,000 jobs in March, which would have been the weakest growth in 10 months, employers added 50,000 more jobs. Employers in February added 332,000 jobs, not the 268,000 originally reported.
The jobs numbers were a “major boost” to the stock market, James said. Investors who had run into bonds because of negative economic reports were selling them Friday, he said.
However, the stock surge was likely a “one-day deal” and didn’t represent a major uptick in overall market volume, he said.
Employers are adding jobs at a time when fewer employers are laying off workers. Initial jobless claims last week fell to the lowest level since January 2008.
There have been other signs of new vigor in recent weeks.
New home sales in March were up 1.5 percent from February and 18.5 percent from March 2012.
More than 24,4000 homes were sold in Ohio through the first quarter of this year. That represents a 13.5 percent from the same time a year ago. Meanwhile, the average sales price climbed 5.7 percent to $125,920.
The area home sales rate this year for southwest Ohio is at its highest since 2007, according to figures released last month by regional boards of realtors.
The U.S. auto industry sold 1.4 million light vehicles in March 2013, which was an increase of 21.8 percent from February and a 3.4 percent increase from March 2012 sales, according to the National Automobile Dealers Association.
The jobs report was good news for the nation, but Ohio’s job growth has stalled, Stock said.
Ohio lost more than 20,000 jobs in March, and the state has created only a few thousand jobs in the last 12 months, compared to 60,000 to 70,000 jobs in each of the previous two years.
The state has seen small increases in manufacturing and the service sector jobs, but construction hiring has declined and the government sector has fallen by more than 11,000 jobs.
Stock said he has “real concerns” for the economy of the Dayton region, where the effects of sequestration are starting to be felt.
The 88th Air Base Wing at Wright-Patterson Air Force Base will cut 40 percent of its budget, or more than $30 million, between now and the end of the fiscal year, base officials announced Thursday. No job cuts will be included as part of the cuts, officials said.
“Wright-Patt has been a source of stability for us and over the period of the Great Recession actually represented a saving grace for us in terms of job growth,” Stock said. “So the events out there are deeply concerning to me.”
The U.S. economy would need to consistently add more than 200,000 jobs per month to meaningfully decrease unemployment, and far too many people cannot find full-time work, said Thomas Kaplan, Ness chair in entrepreneurship and associate professor of business at Wittenberg University.
About 26.8 million U.S. workers are part-time, including 7.9 million who wish to be full-time, according to labor data.
“That is an enormous number of people who aren’t working full-time, and that number rose in April,” Kaplan said. “This is really a jobless recovery. I am inherently an optimist, but I am still pretty pessimistic about the economic environment right now.”