White House gets new boost as businesses add 268,000 jobs

The economy added 268,000 private-sector jobs in April, giving an unexpected boost to a White House already enjoying a good week.

The gains were much greater than the 180,000 expected by analysts and a surprise after weekly unemployment claims spiked on Thursday.

“We are still making progress,” President Obama said in remarks at an Indiana manufacturing plant. He said the job gains showed the resilience of the economy.

Stocks surged on the news that the private sector had gained the most jobs in a month in five years, with the Dow Jones Industrial Average up 120 points at midday.

Total nonfarm payroll employment increased by 244,000 in April, according to Friday’s report from the Bureau of Labor Statistics, with state and local governments continuing to cut workers. 

Despite the job gains, the unemployment rate actually ticked up from 8.8 percent to 9 percent. The job figures and unemployment rate are based on different sets of data.

Obama has seen his approval ratings jump since his announcement Sunday night that a team of Navy SEALs had killed Osama bin Laden during a raid of his compound in Pakistan. The president will visit soldiers in Kentucky later Friday.

Polls suggest voters remain unenthusiastic about the president’s handling of the economy.

The 244,000 jobs added is the most since April and May of 2010, when the number of jobs created spiked because of hiring for the U.S. Census. It appears to be the most jobs the private sector has created since early 2006. 

Labor also revised figures for February and March to show higher job growth.

In February, the figure was revised up from 194,000 to 235,000, while in March the economy is estimated to have created 221,000 jobs instead of 216,000.

Before Obama spoke, the White House already had seized on the report to argue initiatives it has put into place are creating the conditions for companies to add jobs. 

“Today's employment report shows that private sector payrolls increased by 268,000 in April, the strongest monthly growth in five years,” said Austan Goolsbee, the chairman of the Council of Economic Advisers. 

“Despite headwinds from high energy prices and disruptions from the disaster in Japan, the last three months of private job gains have been the strongest in five years,” Goolsbee said in a statement. “We are seeing signs that the initiatives put in place by this administration, such as the payroll tax cut and the business incentives for investment, are creating the conditions for companies to add new jobs and foster the industries of the future.”

Republicans fired off a series of press releases within minutes of the report's release that emphasized the pain high gas prices are inflicting on the country. They also warned that White House policies were contributing to uncertainty in the economy.

House Majority Leader Eric Cantor (R-Va.) said in a statement that while the report was “good news,” it should also serve as a reminder that the government should not prevent additional growth by raising taxes or imposing onerous regulations. “In addition, there is no doubt that high gas prices are hurting families across America.”

Obama also commented on the pain gas prices are causing and called on Congress to end a tax break provided to oil companies, which he said made annual profits of $75 billion to $125 billion.

Sen. Bob Casey Jr. (D-Pa.), chairman of the Joint Economic Committee, said the job figures were encouraging and surprising.

“If I had to guess a couple days ago, I'd have been surprised the private sector was that high,” Casey said.

He said the figures continued a strong trend, but should also serve as a reminder that Washington should keep its focus on jobs. “We've got to focus in a determined way on job creation,” said Casey, who suggested the focus has “kind of drifted away” in recent months.

Casey also said he was “deeply concerned” the administration was moving forward with trade deals with South Korea, Colombia and Panama, which he suggested could result in the loss of manufacturing jobs. The trade deals represent an area where the White House and congressional Republicans have found common ground.

The increase in the jobless rate could reflect the return of discouraged workers to the job force. 

Hundreds of thousands of workers have given up the search for jobs over the past two years, but the report released on Friday said the number of discouraged workers declined by 208,000 from a year earlier. 

Many discouraged workers can be expected to return to the workforce once they see signs that the economy is growing. 

Gains were strong in a number of sectors, including retail, professional and business services, manufacturing and healthcare. Job gains were flat in the construction sector, still hard-hit by the housing crisis.

The strong figures come after a series of disappointing reports on Thursday.

First-time claims for unemployment spiked to 474,000, according to data released by the Labor Department, more than 60,000 higher than expected. This came after a disappointingly slow 1.8 percent GDP growth in the first quarter.

A sell-off in commodities on Thursday that saw the price of crude oil drop below $100 per barrel in the U.S. was attributed to fears the economy was slowing down.

—This story was last updated at 12:46 p.m.

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