A surge in job creation in April plus a large upward revision in jobs created the previous two months dropped the official unemployment rate to 7.5%.
U.S. employers added 165,000 jobs in April, and hiring was much stronger in the previous two months than first thought. The gains trimmed the unemployment rate to a four-year low of 7.5 percent.
The Labor Department report showed the job market is improving despite higher taxes and government spending cuts.
In addition to the April gains, the government said employers added 138,000 jobs in March and 332,000 in February. That's 114,000 more over the two months.
The economy has created an average of 208,000 jobs a month from November through April. That's above the 138,000 added in the previous six months.
But while the rate for those employed or actively looking for work dropped, the broader measure of unemployment - the so-called U-6 - increased from 13.8% to 13.9%:
But there was an area of concern in the report as a broader rate, known as the "U-6″ for its data classification by the Labor Department, increased to 13.9% from 13.8% a month earlier. That includes everyone in the official rate plus "marginally attached workers" -- those who are neither working nor looking for work, but say they want a job and have looked for work recently; and people who are employed part-time for economic reasons, meaning they want full-time work but took a part-time schedule instead because that's all they could find.
In April, the rate ticked up as the number of workers who are part-time but want full-time work increased. That came even as the numbers of hours worked also dropped this month for all workers. This raises the question about the kinds of jobs being created, and whether they can support a faster recovery.
To be sure, a 278,000 jump in the part-time for economic reasons category followed a big drop the month before. But there still are nearly 8 million people in the U.S. who want a better job, while more than 11.5 million remain unemployed.
These modest gains in job creation are not the result of government spending. In fact, government is spending less than anticipated as a result of the sequester. But we were warned to expect job losses because of the budget cuts and, like the sequester scare stories, they have not materialized.
The job gains are not coming because of stimulus spending. They are coming because after 5 years, the pent up demand for new hires is finally being addressed - albeit, by giving workers part time rather than full time jobs with fewer hours.
Other economic indicators point to a slowdown this spring. We'll see how that eventually effects the unemployment situation.