Employers are posting smaller gains than expected this year on their health care spending, but they are seeing a big lift from the Affordable Care Act.
That has helped lift employers’ sales and profit, and they are adding jobs at a faster pace than last year, according to data from the Bureau of Labor Statistics.
The Commerce Department reported Friday that the number of full-time positions grew by 3.7 million, or 5.3 percent, in the month ending March 31, the fastest pace since November.
Job growth picked up by 0.4 percent in April.
In the same month, payrolls increased by 0,946,000, the biggest gain since January and the biggest monthly gain since August 2010.
“Employers are getting more flexible with how they spend their time and energy, so they are taking more advantage of their resources,” said John Stumpf, an economist at JPMorgan Chase & Co. in New York.
Despite the strong pace of hiring, the labor market still faces challenges, including weak demand from workers and a slowdown in construction and other construction jobs.
Even with the gain, the unemployment rate remains high at 8.3 percentage points.
A hiring freeze has slowed hiring and discouraged many workers from seeking work, with employers adding just 3,000 jobs in March, according a report released Thursday by the nonprofit Economic Policy Institute.
For employers, the gain in hiring in March helped offset a sharp drop in hiring over the summer.
But the labor force participation rate, which measures people who are employed or looking for work but not actively looking for a job, was stuck at 62.7 percent, well below its pre-recession peak of 62.9 percent in September 2007.
This year’s gain has led some employers to hire more workers in anticipation of the government shutdown that has kept many businesses closed for the month of March.
More than 20 states have cut back or suspended services or services that employers offer to employees in response to the shutdown.
And federal and local governments are taking steps to restrict access to health care and to reduce benefits to help employers cut costs.
With the jobless rate hovering near 8 percent, many employers are hoping for a rebound this year.
However, employers are taking the cautious approach.
They are looking for the best way to balance the needs of their employees with the needs and priorities of the marketplace, said Mark Dubner, an associate professor of economics at the University of Southern California.
We are seeing an employer market that is responding to the economic conditions of the economy and its changing labor market,” Dubner said.
While some employers are hiring more workers, others are waiting to see how the economy develops.
Among the employers that said they were hiring less than expected are restaurants and catering, grocery and food services, health care service companies, hotels and motels, hotels, and lodging and food service, hotels.
Employers that said hiring was stronger than expected include oil, gas, telecommunications and utilities, financial services, real estate and leasing, health insurance, and other industries.
Read or Share this story: http://usat.ly/1hj0f7s