WASHINGTON – U.S. employers hired workers at the fastest clip in more than two years in April, pointing to a rebound in economic growth after a dreadful winter and keeping the Federal Reserve on track to end bond purchases this year.
The brightening outlook was, however, tempered somewhat by a sharp increase in the number of people dropping out of the labor force, which pushed the unemployment rate to a 5½-year low of 6.3 percent. Wage growth also was stagnant.
Nonfarm payrolls surged 288,000 last month, the Labor Department said Friday. That was the largest gain since January 2012 and beat economists’ expectations for only a 210,000 rise.
March and February’s data were revised to show 36,000 more jobs than previously reported.
U.S. stocks briefly rallied on the report, which was later eclipsed by rising tensions in Ukraine. Stocks ended lower, while safe-haven bids pushed the yield in the 30-year U.S. government bond to its lowest level in more than 10 months.
The dollar was flat against a basket of currencies.
About 806,000 people dropped out of the labor force in April, unwinding the previous months’ gains. That helped to push down the unemployment rate 0.4 percentage point to its lowest level since in September 2008.
The labor force participation rate, or the share of working-age Americans who are employed or unemployed but looking for a job, also fell four-tenths of a point to 62.8 percent last month, slipping back to a 36-year low touched in December.
Overall, however, the data suggested the economy is gathering strength and led investors to pull forward their bets on when the Fed will start to raise interest rates.
The strong payrolls growth added to upbeat data such as consumer spending and industrial production in suggesting that sputtering growth in the first quarter was an aberration, weighed down by an unusually cold and disruptive winter.
Economists expect second-quarter gross domestic product to top a 3 percent pace.
A broad measure of unemployment that includes people who want to work but have stopped looking and those working only part time but who want more work fell to a 20-year low of 12.3 percent in April. It was at 12.7 percent in March.
In addition, the number of people who have been unemployed for more than six months saw its biggest decline since October 2011 and the average duration of unemployment fell to 35.1 weeks from 35.6 weeks in March.
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