US economy adds 223,000 jobs in April, unemployment down to 5.4%

The U.S. economy created 223,000 jobs in April, bouncing back from a sluggish period the first three months of the year, as companies shook off the effects of a surging U.S. dollar and falling profits. The unemployment rate fell to a seven-year low of 5.4%, the Labor Department said Friday.

Economists expected nonfarm payrolls to rise 224,000 in April, with the unemployment rate dropping to 5.4% from 5.5% in March. It was the lowest number since lowest since May 2008.

Investors cheered the renewed strength in the economy, pushing S&P 500 futures higher by about 1%. The report was seen as a so-called Goldilocks scenario, showing a rebound, but not strong enough to rush the Federal Reserve to raise interest rates. Government bond yields, which had been rising, fell after the number was released.

The jobs figure vs. expectations was “close enough,” said Jeffrey Saut, investment strategist for Raymond James. It’s “still consistent with the Fed beginning to raise short-term interest rates later this year.”

This report validated the theory that economic dip was just temporary. But there were enough weak factors to keep the Fed at bay.

Wage growth hinted at a rebound in the economy. Average hourly earnings rose 2.2% from a year ago.

Hiring was up across a broad swath of industries, except for manufacturing and retail. Services added 62,000 jobs, while health care and construction sectors each added 45,000 payrolls.

Private payrolls were largely responsible for the gains, rising by 213,000. The government added 10,000 jobs.

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