WASHINGTON — The economy got what it needed in April: A burst of hiring that added a net 290,000 jobs, the biggest monthly total in four years. It showed employers are gaining confidence as the recovery takes root.
But people who had given up on finding jobs are gaining confidence too and are now looking for work. That’s why the unemployment rate rose from 9.7 percent to 9.9 percent and is likely to go higher.
The new jobs, generated by sectors across the economy, are the first sign that the recovery is adding significant numbers of jobs — even if not enough to absorb the influx of job seekers.
“Companies feel more comfortable that growth in the economy and in their own sales is here to stay and that they can start preparing for the future and add to their payrolls,” said Joel Naroff, president of Naroff Economic Advisors.
The unemployment rate rose because 805,000 people without jobs entered the labor force in April to search for work.
“Individuals are gaining confidence in their ability to find a job and are now throwing their hats into the ring,” said John Challenger, chief executive of the outplacement firm Challenger, Gray & Christmas.
Kelley Bryan had dropped out of the market last year to attend culinary school after 20 years as a secretary. But she started looking for work again in March. “I was starting to get to the point where I felt like I needed to get a job,” she said. “I was living off unemployment and just feeling guilty.”
Not for long. She soon was hired as a restaurant manager in suburban St. Louis. Demand has picked up enough that she’s looking to switch jobs again and is interviewing at hotels.
“It’s a competitive field, but there are plenty of jobs,” she said.
Many economists predict the unemployment rate will rise as people who had given up on finding a job feel better about their prospects. The labor force includes employed people and people actively seeking work — not those who have stopped looking.
The unemployment rate in October hit 10.1 percent, a 26-year high. Some economists now think the rate could go a bit higher and peak at 10.2 percent by June. Still, that’s far lower than some forecasts earlier this year of 11 percent. Unemployment hit a post-World War II high of 10.8 percent at the end of 1982 as the country was emerging from a severe recession during the Reagan administration.
President Barack Obama called April’s job growth “very encouraging news” but said much remains to be done to put more Americans to work.
The number of jobs added in April signaled that businesses are more confident, thanks to rising customer demand. Consumers boosted spending in March by the largest amount in five months. Factory production grew in April at the fastest pace in nearly six years.
