Employers Added 290,000 Workers in April, Most in Four Years

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By Timothy R. Homan

May 8 (Bloomberg) -- Payrolls in the U.S. surged in Aprilby the most in four years, led by gains in private employmentthat signal the economy is less dependent on government support.

The 290,000 increase in employment exceeded the medianestimate of economists surveyed by Bloomberg News and followed a230,000 gain in March that was larger than initially estimated.The jobless rate rose to 9.9 percent from 9.7 percent asthousands of jobseekers entered the workforce, a LaborDepartment report in Washington showed yesterday.

Private employers added 231,000 workers across the economy,from manufacturing to construction to services. General ElectricCo. and Berkshire Hathaway Inc. are among companies adding staffin response to growing sales, indicating gains in consumerspending may spur more hiring.

“Economic growth is translating into a pickup in the labormarket which makes the recovery more self-sustaining,” saidJames O’Sullivan, global chief economist at MF Global Ltd. inNew York. “The strong upward momentum in the data through Aprilshould help absorb whatever drag comes from the turmoil inEurope.”

Financial markets worldwide were rattled this week onmounting concern European leaders won’t do enough to contain afiscal crisis in Greece that threatens to engulf Portugal andSpain. The Dow Jones Industrial Average dropped 1.3 percentyesterday in New York, the fourth straight decline. The Standard& Poor’s 500 Index fell 1.5 percent.

Yesterday’s Labor Department report showed factory payrollsincreased 44,000 in April, the biggest gain since August 1998,while service providers added 225,000 workers, the most sinceNovember 2006. Employment at builders increased for a secondmonth.

Numbers ‘Heartening’

“These numbers are particularly heartening when youconsider where we were a year ago, with an economy infreefall,” President Barack Obama said yesterday. Still, “it’sgoing to take time to repair and rebuild” the damage from therecession and the financial crisis, he said at the White House.

GE, the world’s largest maker of jet engines, power-generation equipment and locomotives, increased the number ofjobs it plans to add in Michigan to more than 1,300 with thecreation of about 220 aerospace manufacturing positions, theFairfield, Connecticut-based company said this week.

Overall payrolls were forecast to increase by 190,000 aftera previously reported March gain of 162,000, according to themedian estimate of 84 economists surveyed by Bloomberg.

The April gain included 66,000 temporary workers hired bythe government to help conduct the 2010 census and a 231,000rise in private payrolls.

Coming Months

“The hiring process has begun in the U.S.,” said StefaneMarion, chief economist at National Bank Financial Inc. inMontreal, who forecast a payrolls gain of 280,000. “We expectjob creation to continue in the coming months.”

The unemployment rate may remain elevated as more peopleenter the labor force in search of work, one reason why theFederal Reserve is likely to keep its benchmark interest rate ata record low.

The jobless rate was projected to hold at 9.7 percent. Thelabor force grew 805,000 in April and employment increased550,000, the Labor Department’s survey of households showed.

The gain in private payrolls was the fourth straight andfollowed a 174,000 increase in March that may have reflected, inpart, a weather-related rebound from the prior month. Privateemployment was projected to climb by 100,000, according to themedian forecast.

Federal government payrolls increased by 65,000 in April,while state and local governments reduced employment by 6,000.

Underemployment Climbs

The so-called underemployment rate -- which includes part-time workers who’d prefer a full-time position and people whowant work but have given up looking -- increased to 17.1 percentfrom 16.9 percent.

The report also showed an increase in long-term unemployedAmericans. The number of people unemployed for 27 weeks or morerose as a percentage of all jobless, to a record 45.9 percent.

Billionaire Warren Buffett, whose Berkshire Hathaway cutmore than 20,000 jobs last year, said his Omaha, Nebraska-basedcompany is now adding staff as the economic recovery boostsdemand at its industrial units.

“We do hire people when we have something for them todo,” Buffett told investors last week in Omaha, Nebraska, whereBerkshire held its annual shareholders’ meeting. “We are a nethirer now.”

To contact the reporter on this story:Timothy R. Homan in Washington at [e-mail]

Last Updated: May 8, 2010 00:00 EDT