Dow Jones Industrial Average pushed past 15,000 briefly after figures showing joblessness had fallen to 7.5% in April
Stock markets rose to record levels as the job market avoided a feared spring freeze by adding 165,000 new jobs last month, marking a four-year low in US unemployment.
Joblessness fell to 7.5% in April, its lowest since December 2008, in news that pushed the Dow Jones Industrial Average past 15,000 briefly and saw Standard & Poor's 500-stock index pass 1,600 for the first time. After the initial surge the Dow Jones Industrial Average edged back below 15,000 in the afternoon, while Standard & Poor's 500-stock index also slipped back below 1,600.
Figures from the US labour department came after a week of worrying signals for the US's fragile economic recovery as the Federal Reserve warned that Washington's budget cuts were holding back the economy.
Federal budget reductions, triggered by the sequestration spending cuts, started in March and initial estimates of the immediate impact on jobs was negative. However, those figures were revised up alongside the publication of the April data. The Bureau of Labour Statistics (BLS) dampened fears of a slowdown on Friday as it declared that the US had added 114,000 jobs over February and March.
In a note to clients, Dan Greenhaus, chief strategist at trader BTIG, said sequestration seemed to have had "little to no effect on this report".
The number of long-term unemployed – those jobless for 27 weeks or more – declined by 258,000 to 4.4 million and their share of the total declined by 2.2 percentage points to 37.4%. Over the past 12 months the number of long-term unemployed has decreased by 687,000, and their share has declined by 3.1 points.
The BLS said that over the prior 12 months employment growth had averaged 169,000 per month. The figure is still low after revisions but the latest report paints a far healthier picture of the jobs market than had been expected.
The private sector added 176,000 new jobs last month. Professional and business services added 73,000 jobs in April and have added 587,000 jobs over the past year, said the BLS.
Employment in temporary help services rose 31,000, professional and technical services added 23,000, and retail trade employment increased by 29,000 in April. The BLS said last month that retail had shed 24,000 jobs, triggering concerns about a slowdown in spending after the imposition of payroll taxes at the end of the year. The manufacturing sector, a closely watched gauge of broader economic strength, was unchanged in April, while government employment fell by 11,000.