The unemployment rate in the United States plunged in April to its lowest level since September 2008 as employers added 288,000 jobs, the biggest rise in two years.
The figures were seen by analysts as a clear sign that the world’s biggest economy is picking up after an unusually cold winter slowed growth.
Bets on US short-term interest rates suggested Wall Street is now pricing in an interest rate hike by the Federal Reserve in June 2015.
The surge in so-called “non-farm payrolls” was the largest gain since January 2012 and beat Wall Street’s expectations for an increase of 210,000. March and February data were revised to show 36,000 more jobs than previously reported. Employment gains in April were broad based, with the private sector adding 273,000 jobs and government payrolls rising 15,000. Manufacturing employment increased 12,000 after rising by 7,000 in March.
Russell Price at Ameriprise Financial said: “The economy really has strong underlying fundamentals supporting its growth. Temporary headwinds such as the bad weather can be certainly managed.”
But the report also raised some concerns over the economy’s health.
While the unemployment rate fell 0.4 of a percentage point to 6.3 per cent, part of the decline was because hundreds of thousands of people left the labour market.
Overall, however, the data suggested the economy was gathering strength and led investors to pull forward their bets on when the Federal Reserve will raise interest rates.
On Wednesday the Federal Reserve, chaired by Janet Yellen, shrugged off the dismal performance figures for the first quarter.
The US central bank, which announced further reductions to the amount of money it is pumping into the economy through monthly bond purchases, said indications were that “growth in economic activity has picked up recently.”