April Jobs report: Best gain in four years

NEW YORK (CNNMoney.com) -- In another sign that the recovery in the U.S. economy is taking hold, employers added significantly more jobs to payrolls in April, according to a government report released Friday.

There was a gain of 290,000 jobs in the month, up from a revised 230,000 jobs added in March. It was the largest number of jobs added to the labor force since March 2006.

The results were much better than expected. Economists surveyed by Briefing.com had forecast a gain of 187,000 jobs.

After nearly two years of job losses, the economy has now added jobs in five of the last six months. With upward revisions for both March and February, there has been a gain of 573,000 jobs since the start of the year.

"It clearly shows that this economic recovery can no longer be seen as a jobless one," said Bart van Ark, chief economist of The Conference Board, a leading business research firm. "Companies apparently are finding they can't squeeze out any more output without adding workers."

The report also includes a separate survey of households that it uses to estimate the unemployment rate, which increased to 9.9%. Economists had forecast the rate would hold steady at 9.7%.

The rise in the unemployment rate is actually a sign of improving perception of labor market conditions. The increase was due to an uptick in job seekers who had previously been discouraged and dropped out of the job market. There was a jump of 805,000 workers returning to the labor force in April alone.

"When you think about the force it takes to get 800,000 beaten-down people off the couch and back on the street looking for work, that's pretty significant," said Lakshman Achuthan, managing director of Economic Cycle Research Institute.

Broad-based gains: The job picture got a lift from the addition of 66,000 jobs by the U.S. Census Bureau, which is in the process of completing the once-in-a-decade headcount of the U.S. population.

But the gains went far beyond that one-time Census boost, as private sector employers added 231,000 jobs. And the gains were broad based, as nearly two-thirds of industries across the private sector added jobs rather than cutting staff.

Manufacturing did exceptionally well, adding 44,000 jobs, the biggest one-month gain in the sector since August 1998. Construction added 14,000 jobs, the second straight month of gains after nearly three years of uninterrupted job losses in that battered sector.

Retailers added 12,400 jobs, and the leisure and hospitality industries added 45,000 jobs on a seasonally adjusted reading, a sign that employers in those sectors see increased consumer demand.

Temporary help services added 26,200 jobs, which economists see as an important sign of future hiring, since employers often take on temporary workers before they add permanent staff. Temp workers have now increased by 330,000 over the last seven months after roughly three straight years of job losses there.

Looking ahead: Still, the gain in jobs this year has barely made a dent in the 8.4 million jobs that were lost in 2008 and 2009. And the 15.3 million unemployed workers are suffering a great deal. A record 46% have been out of work six months or longer.

The so-called underemployment rate, which includes workers who are discouraged and those who are working part-time jobs because they can't find full-time work, rose to 17.1%, the highest level in the 17 years that figure has been calculated.

"This week's job numbers comes as a relief to Americans who found a job," President Obama said in remarks Friday morning. "But it offers obviously little comfort to those who are still out of work."

He pledged to take additional steps to help businesses hire workers.

Republican critics of the administration focused on the unemployment rate rather than gain in payrolls.

"Positive job growth is always welcome news, but this rising and painfully high unemployment rate is a far cry from President Obama's promise that the trillion-dollar 'stimulus' would keep joblessness from rising above 8%," said House Minority Leader John Boehner in a statement.

But the strength in the report raised hopes the economy will continue to add jobs at an even stronger pace going forward.

"I don't think this is the high water mark," said Jack Kleinhenz, economics professor, Case Western Reserve University. "But even with stronger gains ahead, we have a long way to go."

Achuthan said the upswing in both the overall economy and the labor market is particularly important for helping withstand external shocks, such as worries about the Greek government possibly defaulting on debt or large drops in the stock market, as were seen Thursday.

"The jobs report underscores this is a resilience of the recovery," he said. "When the business cycle is in an upswing, it starts to feed on itself, and the economy can withstand a pretty big shock without being tipped into a new downturn."

U.S. stocks started the day higher following the pre-market jobs report, but within the first hour of trading, fell into negative territory once again.