Economy adds 244,000 jobs, but unemployment rate ticks up

Employers added more than 200,000 jobs in April for the third straight month, the biggest hiring spree in five years.

The Labor Department reported Friday that the economy added 244,000 jobs last month. Private employers shrugged off high gas prices and created 268,000 jobs — the most since February 2006.

The job gains were widespread. Retailers, factories, financial companies, education and health care and even construction companies all added jobs. Federal, state and local governments cut jobs.

But the unemployment rate ticked up to 9 percent, from 8.8 percent in March, the first increase since November. The government uses a separate survey to calculate the unemployment rate. The survey sometimes diverges from a separate survey used to determine the number of jobs employers added.

The latest employment figures suggest businesses are confident in the economy despite weak growth earlier this year and soaring gas prices that have weighed on consumers. The government said job gains in March and February were even stronger than first reported.

Gas prices had risen for 44 straight days before holding steady Friday at a national average of roughly $3.99 a gallon.

"The U.S. labor market strengthened in April, damping concerns that rising energy costs are staunching the recovery, said Sal Guatieri, an economist at BMO Capital Markets Economics.

Workers' paychecks edged up in April. Average hourly earnings rose to $22.95, up from $22.93 in March.

All told, there were 13.7 million people unemployed in April, still almost double since before the recession began in December 2007.

Including part-time workers who would rather be working full time, plus people who have given up looking altogether, the percentage of "underemployed" people rose to 15.9 percent in April.

To calculate the unemployment rate, the government calls 60,000 households and asks people if they're working or looking for a job. This survey includes the self-employed, farm workers and domestic help — people not counted in the payroll survey.

By contrast, the government surveys about 140,000 businesses and government agencies to determine the number of jobs added.

Most analysts agree the economy has strengthened enough to keep growing this year. And many say the factors that held back growth at the start of the year were most likely temporary. They predict growth will pick up over the rest of the year.

There have been some positive signs. Retailers reported strong April sales, helped by a late Easter. Auto companies reported brisk sales. And factories have expanded production this year at the fastest pace in a quarter-century.

Economists' prediction for a pickup in overall growth is based, however, on gasoline prices stabilizing in the months ahead and then dropping to around $3.50 a gallon or lower near the end of the year.