Hiring is up, but so is unemployment
Despite growing unease in the financial markets, the American economy is gathering steam, adding an unexpectedly large number of jobs last month.
The Labor Department’s monthly snapshot of the job market, released on Friday, showed that employers added 290,000 jobs in April, the largest gain in four years, and that they did so across a broad swath of industries. The U.S. has now added jobs for four straight months.
The unemployment rate, however, crept up to 9.9 percent from 9.7 percent in March, mostly because of a significant increase in the number of people who had previously given up deciding to look for work again.
Major stock gauges in the United States rose briefly on the unexpectedly strong job growth report before gyrating in a trading day marked by continuing fears about spreading European debt woes and concerns about structural weaknesses in the stock markets that may have contributed to a terrifying selloff on Thursday.
European leaders were meeting in Brussels on Friday in discussions that were expected to continue over the weekend on ways to reassure investors that the heavily indebted countries within the euro zone would not face debt defaults and to restore confidence in Euroepan banks.
The stock market has raced higher this year, before retrenching the last few days, and American companies have posted record profits. But stock investors increasingly fret that the economic recovery here could be threatened by a European-led debt crisis.
Economists suggest that as long as the debt crisis is primarily contained to Greece — or even a few other countries — the effect on the U bad credit pay day loans.S. will be minor. But a full-blown financial crisis across Europe could affect U.S. banks, and in turn, how much credit they offer American companies or consumers.
Another risk for the U.S. economy is if foreign investors flee to the dollar and abandon the euro. That would strengthen the dollar, making it difficult for American companies to sell their goods abroad.
"I think at this point the U.S. economy has a very good chance of being able to continue its recovery despite the uncertainty in Europe," said Bernard Baumohl, chief global economist at the Economic Outlook Group. "But the threat is real, and we have to be vigilant and very nimble."
All manner of businesses were hiring, including those in manufacturing, leisure and hospitality and health care. One of the strongest gains occurred in manufacturing, which added 44,000 jobs, the largest increase since 1998.
The Census Bureau contributed 66,000 temporary jobs last month.
Yet in a sign that many people will not struggle to find a job even as the economy improves, the number of people who have been out of work for more than six months hit 6.7 million, nearly 46 percent of the unemployed.
"The economic recovery and expansion is entrenched, sustained and sustainable," Allen Sinai, chief global economist at Decision Economics, said.
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