Moderate hiring in April and big upward revisions to past months eased fears the economy will dive into another slump, but the more uneven details gave no indication of any new momentum.
Payrolls grew by 165,000, with March and February gains adjusted up by a combined 114,000, said the Labor Department Friday. The jobless rate dipped to 7.5%, the lowest since December 2008.
But while more Americans entered the workforce, the labor participation rate held at the 1979 level of 63.3%. A broader gauge that includes underemployment ticked up to 13.9%. Also, the workweek shrank, and a smaller share of industries added jobs.
Stock indexes rallied about 1% as investors see no change to the "new normal" Goldilocks economy — no recession, but growth too weak to spur the Federal Reserve to trim its easy-money bond-buying program.
The latest payroll report, while better than expected, is still in line with a "drudging, stumbling recovery," said Lawrence Creatura, a portfolio manager at Federated Investors.
"This has been a continuation of marginal improvement," he said. "This really isn't anything new.
April's job gains also were concentrated in lower-wage areas like retailers, restaurants, doctors' office staff and home health care. Payrolls at manufacturers were flat, and construction firms shed 6,000 jobs.
The retail workweek fell to a three-year-low 30 hours, further evidence of employers' perverse incentives to avoid ObamaCare mandates and fines next year.
Temp agencies added 30,800. While that may be a precursor to more robust permanent staffing, it also could indicate reluctance to take on workers amid a sluggish economy and ahead of the health law's full implementation.
Overall, the job numbers are enough to support moderate economic growth, wrote Julia Coronado, North America chief economist at BNP Paribas, in a research note. A slowdown is still on the way, but it looks like more of a lull, with some help from international trade.
"The good news is that we are growing off of global strength as U.S. households deleverage their balance sheets," she said. "The bad news is that these jobs are generally lower quality.
Wage growth among production workers and nonsupervisors slowed to 1.7% annually, reflecting the composition of job gains. But cooler inflation should offer some relief to weak pay.
The service sector could ease its hiring in coming months. The Institute for Supply Management's nonmanufacturing index slipped to 53.1 in April from 54.4 in March, and the jobs gauge weakened for the third straight month to 52. Growth in output, orders and exports also slowed.
A purchasing manager in professional services surveyed by ISM noted "continued corporate cost pressures creating greater demand for cost restructuring/productivity work."