U.S. economy rebounds with solid job gains

WASHINGTON – Rebounding from a dismal start to the year, the U.S. economy added 223,000 jobs in April, a solid gain that suggested that employers are helping fuel a durable if still subpar recovery.

The job growth helped lower the unemployment rate to 5.4 percent from 5.5 percent in March, the Labor Department said Friday. That is the lowest rate since May 2008, six months into the Great Recession.

The figures provided some reassurance that the economy is recovering from a harsh winter and other temporary headwinds that likely caused it to shrink in the first three months of the year. Yet the bounce back appears to be falling short of hopes that growth would finally accelerate in 2015 and top 3 percent for the first time in a decade.

Most analysts foresee the economy growing about 2.5 percent this year, similar to the modest expansion typical of much of the 6-year-old recovery.

In its report Friday, the government revised sharply down its estimate of March’s job gain to 85,000 from 126,000. In the past three months, employers have added 191,000 positions, a decent total but well below last year’s average of 260,000.

“Job growth is going from great to good,” said Michael Feroli, an economist at JPMorgan Chase.

One reason the economy hasn’t accelerated faster is that overseas economic turmoil is still restraining growth. A stronger dollar, which makes U.S. goods more expensive overseas, has cut into factory production. Manufacturers barely added jobs for a second straight month. And last year’s plunge in oil prices has led drilling companies to lay off thousands of workers.

Investors breathed a sigh of relief Friday because the figures suggested an economic rebound from the January-March quarter – but one not so explosive as to likely cause the Federal Reserve to raise interest rates from record lows anytime soon. The Dow Jones industrial average soared 267 points to close up 1.5 percent.

The unemployment rate is nearing the level the Fed considers healthy. Yet many other signs suggest that the job market isn’t fully recovered. The number of full-time workers, for example, fell in April while the number of part-timers jumped more than 400,000 to 27.7 million – a half-million more than a year ago.

The increase came from Americans who said they preferred part-time work, the report said. The number of part-timers who want full-time jobs declined 100,000 to 6.6 million. That’s still above pre-recession levels.

The nation’s job growth still isn’t raising worker pay much. Average hourly wages rose just 3 cents in April to $24.87. Wages have risen only 2.2 percent over the past 12 months, roughly the same sluggish pace of the past six years.