STEVE INSKEEP, HOST:
We now have indications that the U.S. job market is still doing pretty well after all. Job numbers were lousy in March. Experts were hoping that was a weather-related aberration. And now we have the numbers for April - turns out that employers added 223,000 jobs to payrolls. NPR's John Ydstie has the details.
JOHN YDSTIE, BYLINE: Economist Jim O'Sullivan of High Frequency Economics says the April numbers suggest the U.S. economy remains on track after a bit of a scare in March.
JIM O'SULLIVAN: I would say it's telling us that certainly the weakness we saw in the March number was a false alarm and that the economy is still growing pretty healthily.
YDSTIE: Over the past three months, job growth averaged close to 200,000. But the March numbers were even uglier than first thought. Today's report revised job growth during that month down to 85,000. O'Sullivan says the statistical volatility in the jobs report was probably a factor, along with some late winter storms.
O'SULLIVAN: The weather may well have been part of the story for sure. And maybe there was some concentrated effects from the oil drilling and the manufacturing weakness as well.
YDSTIE: The strong dollar has hurt manufacturing by making U.S. exports more expensive abroad. And the drop in oil prices has cut employment in the oil and gas industry. That weakness continued to be evident in today's report.
O'SULLIVAN: Certainly when you look at the details, the mining category, which is where, say, the oil drillers are, has weakened fairly noticeably. It was down 15,000 this morning. And the manufacturing numbers, while they haven't collapsed, have pretty much flatlined in the last couple months.
YDSTIE: But O'Sullivan thinks the underlying economy remains healthy, and the negative effects of the oil price drop should soon reverse.
O'SULLIVAN: When you think about the effects of lower oil prices, for sure it's a negative for the oil drillers. But it's not clear if we've seen the full plus yet in the other parts of the economy, in terms of consumer spending. And maybe there's a little bit more of a lag there. So I suspect the trend is actually a bit better than this 194 per month, so-far-this-year average.
YDSTIE: The job growth numbers for the first 4 months of the year, while weaker than 2014, are still strong enough to keep the unemployment rate falling, according to O'Sullivan. In fact, the unemployment rate notched down another tenth of a percent in April, to 5.4 percent. O'Sullivan thinks that's likely to keep the Federal Reserve on track to begin raising interest rates later this year, probably in September. Another weak wage growth number in today's report suggests the Fed can hold off raising rates in June. John Ydstie, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
