May 3, 2013

April employment report fuels confidence

The jobless rate drops to 7.5 percent as February and March figures are updated.

By CHRISTOPHER S. RUGABER The Associated Press

(Continued from page 1)

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People wait in line before the Dr. King Career Fair at the Empire State Plaza Convention Center in Albany, N.Y., in April. U.S. employers added 165,000 jobs in April, the Labor Department said Friday.

The Associated Press

Americans' confidence in the economy jumped last month, lifted by a brighter outlook for hiring and expectations for higher pay, according to the Conference Board, a research group. Cheaper gasoline, the booming stock market and rising home values are also no doubt making people more confident.

Home prices rose 9.3 percent in February compared with a year ago, the most in nearly seven years, according to the Standard & Poor's/Case-Shiller 20-city index.

Still, prices nationwide remain about 30 percent below their peak during the housing bubble in 2006. They're back only to where they were in 2003.

Yet the global economy, by contrast, is slowing. The European Union warned Friday that the 17 countries that use the euro will shrink by a collective 0.4 percent this year. And unemployment in the eurozone is expected to hit an average of 12.2 percent. In Greece and Spain, it is forecast to reach 27 percent.

Fed Chairman Ben Bernanke and European Central Bank President Mario Draghi have suggested that governments need to focus on stimulating growth and not just on spending cuts and deficit reduction.

Economists have forecast that the U.S. economy will grow roughly 2 percent this year, below last year's 2.2 percent. The Congressional Budget Office has estimated that the tax increases and government spending cuts will have shaved about 1.25 percentage points from growth this year. That means that without those measures, the economy could have grown a strong 3.3 percent in 2013.

In April's employment report, more Americans said they had part-time jobs even though they wanted full-time work. That figure rose 278,000 to 7.9 million, reversing a steep drop the previous month.

Some economists worry that restaurants, retailers and other companies are hiring more part-timers in preparation for the start of health care reform. Companies with more than 50 full-time employees in 2013 will be required to provide health insurance to their full-time staff next year.

Retailers, restaurants and hotels added 48,000 more jobs in February than previously reported. They accounted for three-quarters of that month's revision.

The government revises each month's job totals twice in the following two months. The revisions occur because many companies in the survey submit their responses late.

Friday's report said the number of people who have been unemployed for more than six months dropped 258,000 to 4.4 million. Over the past year, the number of long-term unemployed has declined by 687,000.

Some analysts cautioned that April's job gains don't necessarily point to faster hiring ahead.

"There is little sign in these data to suggest that a marked acceleration in monthly job creation in the months ahead is in the cards," said Scott Anderson, chief economist at Bank of the West.

 

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