US unemployment figures for April provided a pleasant surprise for once with new jobs created coming in at a stronger level than analysts had been expecting. The month saw some 165000 new jobs created; about 20000 more than analysts had anticipated. Additionally, the US Department of Labor revised its estimates for job creation in March and February upwards by 64000 to 332000 and by 50000 to 138000 in March. The upshot of the revisions and the new data is that the current unemployment figure stands at 7.5% of the workforce which is the lowest level seen for four years. The revised February figure means that that month has seen the best improvement in the job situation since May 2010.
According to the Department of Labor, the decline in unemployment is due to the creation of new jobs rather than people ending their hunt for employment (to be considered as unemployed, you have to be actively looking for work). However, the number of workers employed in the construction sector declined in April and the manufacturing sector was essentially flat – these facts suggest that the recovery continues to be sluggish, but the April figures and revisions do provide a rare ray of sunshine.
The improved employment situation encouraged investors to push the Dow Jones Industrial average to a fresh record high, crossing over the 15000 point for the first time, before falling back slightly. The news also pushed the Dollar higher on Forex markets before investors fully absorbed the information. It had gained strongly against the Euro on the (simultaneous) news that the European Central Bank had cut its interest rate from 0.75% to 0.5%, a new low, in a bid to stimulate the flagging Eurozone economy.