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By Victoria Stilwell
May 8 — Job growth rebounded in April following a bigger setback the prior month than previously estimated, a sign companies are confident the U.S. economy will reboot after stagnating earlier this year, figures from the Labor Department showed May 8.
The unemployment rate dropped to 5.4 percent, the lowest since May 2008 as more Americans entered the labor force and found work.
The 223,000-job gain in payrolls followed an 85,000 increase in March, which was revised down from 126,000 earlier and was the smallest since June 2012. Average hourly earnings climbed less than forecast.
Construction and health care were among the industries that accelerated the pace of hiring last month, as the economy emerged from temporary setbacks in the first three months of 2015 that included bad weather and a labor dispute that slowed West Coast ports.
“The pace of employment is quite encouraging,” said Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA Inc., whose payrolls forecast of 221,000 was among the closest in a Bloomberg survey of economists. “Wage growth is accelerating, but it's quite gradual—more gradual than we would expect in a market where the unemployment rate is 5.4 percent.”
The median forecast in a Bloomberg survey of 96 economists called for a 228,000 advance.
Revisions subtracted a total of 39,000 jobs from overall employment gains in the previous two months.
The participation rate, which indicates the share of working-age people who are employed or looking for work, increased to 62.8 percent from 62.7 percent in March, which matched the lowest since 1978.
Wage growth remains limited, with average hourly earnings rising 0.1 percent in April after a revised 0.2 percent gain the prior month that was weaker than initially reported. Compared with a year earlier, hourly pay was up 2.2 percent last month, less than the Bloomberg median estimate of 2.3 percent.
The average work week for all employees held at 34.5 hours.
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