Employers added 244,000 net new payroll jobs in April according to the Bureau of Labor Statistics’ establishment survey, blowing away analysts’ expectations for 185,000. Government employment declined by 24,000, meaning that the private sector created 268,000 net new jobs – the best one-month performance since February 2006. Total employment gains for February and March were revised upward by 46,000, meaning that employers have added an average of 233,000 in each of the last three months, a very healthy level of hiring.
· Every major sector except government added jobs, led by retail (+57,000), professional and business services (+51,000), education and health services (+49,000), leisure and hospitality (+46,000) and manufacturing (+29,000).
· The subsectors posting the biggest, statistically significant one-month gains included general merchandise stores (+27,400), food services and drinking places (+26,800), ambulatory health care services (+21,500), heavy and civil engineering construction (+12,700), hospitals (+10,100) and motor vehicle and parts dealers (+6,900).
· The fact that retailers and restaurants are staffing up shows confidence that consumer spending – which accounts for 70 percent of GDP – can be sustained despite recent increases in gas prices.
The news, as usual, is not all good. The BLS’s companion survey of households revealed that April’s unemployment rate increased to 9.0 percent from 8.8 percent in March, and the number of people saying they had not worked in the last month increased by 191,000. Although that is cause for concern, the establishment survey is based on a larger sample and is thus viewed as less volatile than the household survey.
The report of better-than-expected hiring last month comes at a time when other indicators suggest the economy might be losing steam – the GDP report showing substandard first-quarter growth of 1.8 percent and the Institute for Supply Management’s non-manufacturing index, which dropped sharply last month. The jobs report may blunt some of the negative sentiment that had been building, and it is a good sign for commercial real estate markets.
Have a great weekend.
SVP, Chief Economist
Grubb & Ellis