More workers were hired in the U.S. at the fastest pace in over two years last month, indicating the economy was starting to pick up after the brief winter lull. This clears the path for the Federal Reserve to phase out its monthly asset purchases in 2014.
Nonfarm payrolls increased 288,000 in April, reported the Labor Department on Friday. This was the biggest advance since January 2012, and exceeded the economists’ prediction of a 210,000 gain.
“It lends significant legitimacy to the positive tone in the wide array of post-February economic reports, which have all been consistently pointing to a significant pick-up in economic growth momentum this quarter,” Millan Mulraine, deputy chief economist at TD Securities in New York, told Reuters.
However, unemployment rate slid to 6.3 percent, the lowest in 5 ½ years as more people dropped out of the labor market. Data in February and March was re-evaluated to indicate that 36,000 more people were hired than was announced earlier.
An estimated 806,000 individuals left the job market last month, adding 0.4 percent to the unemployment rate which touched its lowest level since September 2008.
The jobs report sent the U.S. dollar and stocks surging, though the Ukraine tensions weighed on the gains. U.S. Treasury prices surged. The labor force participation rate, which measures the percentage of working-age Americans who are either working or are jobless but actively looking for work fell to 62.8 percent in April, the lowest level in 36 years which was last recorded in December.
The Federal Reserve nonetheless ignored the weak performance in the first quarter and rolled out further tapering of the monthly bond-buying program. It also said that economic growth had accelerated in the second quarter.