US upbeat as firms create 288,00 jobs

US employers boosted payrolls in April by the most in two years and the jobless rate plunged to 6.3% as companies grew confident the American economy is emerging from a first-quarter slowdown.

US upbeat as firms  create  288,00 jobs

The 288,000 gain in employment was the biggest since January 2012 and followed a revised 203,000 increase the prior month, according to US Labor Department figures.

Unemployment dropped to its lowest level since September 2008.

Households spent more freely as the first quarter drew to a close and manufacturing accelerated, helping explain why companies such as Ford Motor company are taking on more workers.

The figures corroborate the US Federal Reserve’s view that the expansion is perking up after stagnating in the last quarter, indicating it will keep trimming stimulus.

“The economy is gathering momentum after the bad winter,” said Michael Gapen, senior US economist at Barclays in New York.

“The unemployment rate will stay in its downward trend, which means tapering will continue,” he said.

In April, construction companies added the most jobs in three months and retailers took on the most workers this year.

One cloud in the employment report is that worker pay is stagnating.

Average hourly earnings held at $24.31 in April, and were up 1.9% over the past 12 months, the smallest gain this year.

The drop in the unemployment rate from March’s 6.7% came as the agency’s survey of households showed the labour force shrank by more the 800,000 in April.

The so-called participation rate, which indicates the share of working-age people in the labour force, decreased to 62.8%, matching the lowest level since 1978, down from 63.2% a month earlier.

Forecasts for April payrolls ranged from increases of 155,000 to 292,000.

Last year, the US added more than 194,000 jobs each month, compared with about 186,000 in 2012.

Last month, hiring by companies surpassed the pre-recession peak for the first time. Private payrolls, which don’t include government agencies, increased 273,000 in April.

Americans are the most upbeat about finding a ’quality job’ than at any time since January 2008, according to Gallup data released last week.

A separate survey by the Conference Board shows the proportion of consumers who said jobs would become more plentiful in the next six months climbed in April to its highest level since January.

— Bloomberg

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