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US adds 165K jobs in April; unemployment 7.5%

Job seekers line up to meet with a recruiter during a job fair in Hayward on April 24, 2013
Job seekers line up to meet with a recruiter during a job fair at the Alameda County Office of Education in Hayward, California on April 24, 2013. The US economy added a solid 165,000 jobs in April, and the unemployment rate fell from 7.6 percent to 7.5 p

A solid job creation report for April and a fall in the jobless rate to 7.5 percent sweetened the picture for the US economy Friday, amid worries that it has tumbled into a "spring slump."

The Labor Department said the economy added a firm 165,000 jobs last month.

But it also revised sharply upward the job growth numbers for February and March, adding 114,000 net new positions to the previously reported data, all in the private sector, even as taxes rose and government spending tightened.

Together that pressed the unemployment rate down 0.1 percentage point to 7.5 percent, underscoring steady if not spectacular gains in the job market in the past year. In April 2012, the jobless rate was 8.1 percent.

The better-than-expected data sparked a surge in US stocks, with the key indices jumping one percent on the news, while the dollar, after a brief spike higher, headed lower again.

Around 1503 GMT, the S&P 500 was up 1.3 percent at 1,617, while the Dow Jones Industrial Average smashed through the 15,000 barrier for the first time, gaining 1.2 percent to 15,006.

The dollar was at $1.3134 to one euro, down from $1.3063 late Thursday.

Alan Krueger, chairman of the White House's Council of Economic Advisers, said the data showed the economy's continuing pull away from the 2008-2009 Great Recession.

But he warned that the push for more federal spending reduction by Republicans in Congress could hurt growth.

"Now is not the time for Washington to impose self-inflicted wounds on the economy," he said in a statement.

"The administration continues to urge Congress to replace the sequester with balanced deficit reduction, while working to put in place measures to create middle-class jobs, such as by rebuilding our roads and bridges and promoting American manufacturing."

The Labor Department report sharply revised the overall picture of employment and the economy more broadly from just one month ago, when analysts were shocked by the initial estimate of net jobs generated in March, a paltry 88,000.

The better-than-expected employment data showed much stronger hiring in February and March than previously reported.
The US economy added a solid 165,000 jobs in April, and the unemployment rate fell from 7.6 percent to 7.5 percent, its lowest level since December 2008, the Labor Department said.

Coupled with other data, the March report had suggested a spring stall in the economy, believed explainable by higher payroll and other taxes that took effect in January, and the sharp "sequester" federal spending cuts initiated on March 1.

The big surprise in the report was the revision of the March jobs growth number to 138,000, as well as February's, which gained 64,000 to 332,000.

"The message is that last month's weaker-than-expected report was largely a false alarm; that is is also the signal from jobless claims," said Jim O'Sullivan, chief US economist at High Frequency Economics.

April's gains were all in the private sector, as government continued to shed jobs amid tough budget cuts.

Job creation was strongest in the professional and business services sector, tourism and entertainment, retail trade and health care, while industrial sector jobs shrank.

Still, there were clear signs of ongoing weakness in the data.

Average hours worked per week in the private sector slipped to 34.4 from 34.6 in March, a possible sign of weakness in the economy, as was a 278,000 rise in the number of people forced to work part time, to 7.92 million.

The number of people counted as officially unemployed was little changed at 11.7 million.

In addition, the fall in jobs in the industrial sector, with manufacturing jobs flat, showed that efforts to rebuild US industry into a larger motor of the economy were sagging.

Analysts at Nomura Global Economics said those details suggested there has been a slowdown in growth in the past two months.

"Though the headline data were stronger than expected, the indicators of economic activity within the report were weaker and are consistent with a slowdown in economic activity as we entered the spring," they said.