2008 record      

 

Employers hired the most in four years in April, the government said Friday, on growing confidence that the economic recovery was on solid footing.

But investors, reeling from Thursday's intraday dive, continued to sell in volatile trade. The Dow fell 1.3%, the S&P 500 1.5% and the Nasdaq 2.3%.

Nonfarm payrolls grew by 290,000 last month, the most since March 2006, the Labor Department said. Wall Street expected just 187,000 jobs.

The jobless rate unexpectedly rose 0.2 point to 9.9%. That was due to a big influx of people re-entering the labor market as job prospects improve.

"The jobs report was phenomenal and the market is ignoring it," said Phil Orlando, chief equity strategist at Federated Investors.

Germany on Friday approved its share of a 110 billion euro EU-IMF bailout for Greece. The European Central Bank is widely expected to provide European banks with emergency funds.

"The risk is that the Greek sovereign debt crisis metastasizes and becomes a global contagion that jumps the pond and impedes our continued economic improvement," Orlando said. "We don't think it's very likely."

U.S. manufacturing grew in April at the fastest rate in almost six years while the service sector continued to expand.

Consumer spending rose for a sixth straight month in March, though retailers reported sluggish April sales.

Hiring in April was boosted by 66,000 temporary workers to conduct the 2010 Census. But the private-sector created 231,000 jobs, far more than expected.

Gains were broad-based. Goods producers added 65,000 jobs, including 44,000 in manufacturing and 14,000 in construction. Service firms hired 166,000 new workers, with gains in business services, retail, education and health care, and hospitality sectors.

The average workweek expanded, a sign that employers may need to add staff in the months ahead.

Meanwhile, the Labor Department revised higher its February and March payroll figures by 93,000 jobs. "This is a fabulous jobs report, and it's impossible to find much to complain about," said Richard DeKaser, chief economist at Woodley Park Research.

But 15.2 million people remain out of work, with a record 6.7 million, or 45.9%, unemployed for 27 weeks or more. Many of the jobs lost in the recession will never return, analysts say.

The underemployment rate, including people who have given up looking for work and part-time workers who want to be full time, rose 0.2 point to 17.1%. That's near October's record high of 17.4%.

A new IBD/TIPP poll found 28% of Americans say at least one family member is looking for work. Also, 34% say they're worried that a family member could be laid off.

Small firms, typically America's biggest job creators, remain glum.

"The steep recession will unlikely be followed by a steep recovery; the numbers just aren't moving in that direction," said Bill Dunkelberg, chief economist for the National Federation of Independent Business, in a statement Friday.

"There is little enthusiasm among owners to hire more workers, primarily due to continued weak sales trends," he added.

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