U.S. employers went on a hiring spree last month, providing the strongest evidence to date that the economy is expanding after a brutal winter hindered growth.
According to the Labor Department, U.S. employers added 288,000 jobs in April, in their biggest increase in two years. The U.S. unemployment rate declined four-tenths of a point to 6.3 percent. Now, that’s its lowest level since September of 2008, but the drop occurred because the number of people seeking work fell by more than 800,000. Remember, people aren't counted as unemployed if they're not actively looking for a job.
Hiring last month was broad-based and included higher-paying jobs: Manufacturers added 12,000 workers, construction companies boosted their payrolls by 32,000, and professional and technical services, which include accountants and engineers added 25,000 workers.
Most of the latter positions, of course, are concentrated in densely populated urban areas, but a key barometer of the rural economy also revealed dramatic improvement in the Midwest.
Strong foreign demand and a diminished focus on health care reforms pushed Creighton’s Mid-America Business Conditions Index to its highest level in 3 years.
Ernie Goss, Creighton University Economic Forecasting Group: “...it was coming off some weak, at least not stellar results from the first quarter. In other words, we had some weather related slower growth in the first quarter. So it was an improvement from that. So it was a good report looking and pointing to growth in the weeks and months ahead.”
The Index, created from a survey of supply managers in the nine-state Mid-America region, rose nearly 4 percent from March to hit 60.4 in April – the best showing since March of 2011. Anything over 50 suggests the economy will likely grow over the next three to six months.
The biggest story in the numbers was a 12 percent jump in export orders that kept a 6-month trend alive.
Ernie Goss, Creighton University Economic Forecasting Group: “Imports were up as well. As businesses in the region expand, they increase their orders from abroad – that was up. So, all-in-all, it was a very good report.”
Factors pushing the index higher included employment numbers above growth neutral for the 4th straight month as the Midwest clawed its way out of what seemed like a never-ending winter. Managers also said wholesale prices for raw materials soared to their highest level since March of 2012 as supplies held relatively steady at a rate above growth neutral. And optimism for economic growth stretching into the 4th quarter increased 9 percent as concern over the Affordable Care Act, or ACA, was greatly reduced. Of the managers surveyed, 65 percent indicated the ACA has had little or no impact on their operations.
Despite the improvement, Goss cautioned that the index for May, while remaining strong, will not be as impressive as April.
Ernie Goss, Creighton University Economic Forecasting Group: “So the jumps that we will see in the months ahead won’t be nearly as great and we could the index see movement a bit lower for the month of May. But a movement down, you could still move down and still have a pretty good number for the month of May.