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Solid Job Gains In April Ease Fears About Economy

The stronger job growth suggests that the federal budget cutting "does not mean recession," said John Silvia, chief economist at Wells Fargo. "It does not mean a dramatic slowdown."

The unemployment rate edged down from 7.6 percent in March and has fallen 0.4 percentage point since the start of the year, though it remains high. To help spur borrowing, the Fed has said it plans to keep its benchmark interest rate at a record low near zero at least until unemployment falls to 6.5 percent.

The last time unemployment was lower than it is now was in December 2008, when it was 7.3 percent.

One cautionary note in the employment report: Most of the biggest job gains were in lower-paying fields, such as hotels and restaurants, which added 45,000 jobs, and retail stores, which added 29,000.

By contrast, construction companies and governments cut jobs. Manufacturing employment was flat.

Some higher-paying sectors added workers. For example, professional and technical services, which include jobs in accounting, engineering and architecture, added 23,000 jobs. Education and health services gained 44,000.

Average hourly pay rose. But because employees in the private sector worked fewer hours, average weekly paychecks declined.

But over the past year, total pay after adjusting for inflation is up a healthy 2.1 percent, economists said. That should help boost consumer spending in coming months.

The job growth is occurring while the U.S. economy is growing modestly but steadily. It grew at a 2.5 percent annual rate in the January-March quarter, fueled by the strongest consumer spending in two years.

The housing recovery is helping drive more hiring. Rising home sales and construction help create jobs and increase spending on furniture, landscaping and other services.

One company that's benefited is SolarCity, based in San Mateo, Calif. Rising home building has helped increase demand for the solar-power systems the company installs in homes and businesses.

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