It looks as though the optimists won in April. Those predicting that the March slowdown in job growth was just a temporary blip related to the difficult winter weather may have been right—in April, the U.S. economy added a healthy 223,000 jobs, and the unemployment rate dipped to 5.4%. This could be an early sign that the second quarter is reviving after economic growth fell to nearly zero in the first quarter.
In April the positives certainly outweighed the negatives. Some of the industries with the strongest gains included professional/business services (up 62,000 jobs), education and health services (up 61,000 jobs), and construction (up 45,000 jobs).
Even government employment (up 10,000) contributed to April’s job gains, a sharp contrast to the contraction in public sector jobs that continued long after the recession ended.
The improvement in construction employment came largely from specialty trade contractors, where the number of jobs jumped by 41,000 in April after slipping by 7,000 jobs in March. The April gains were spread evenly between residential specialty trade contractors (up 20,800) and nonresidential specialty trade contractors (up 20,200).
The economy still faces hurdles in the months ahead. For example, global economic weakness has strengthened the U.S. dollar as foreign investors flock to investments in the better-performing U.S. economy.
The strong U.S. dollar is good for American consumers but bad for American manufacturers who are having a difficult time competing with foreign producers both at home and abroad. This has led to a surging trade deficit, and in April, the manufacturing sector added just 1,000 jobs over the month.
Lower oil prices have also cut into energy-related jobs. In April the mining sector lost 15,000 jobs and in the first four months of 2015, nearly 49,000 jobs were lost as higher-cost shale oil facilities were shuttered.
With energy prices now turning upward and the global economy slowly on the mend, most economists, including those on the Federal Reserve Board, are moving to or remaining in the optimist category. Employment is widely expected to grow at a healthy pace over the remainder of the year and the economy is predicted to rebound as the year progresses. Economic growth should turn in a respectable 3.0% or better increase for the year as a whole.