(Bloomberg) -- Payrolls rebounded in April following an evenbigger setback a month earlier than previously estimated, a signcompanies are confident the U.S. economy will reboot afterstagnating early this year. The unemployment rate droppedto 5.4 percent.

The 223,000 net increase in employment followed an 85,000 gainin March that was the smallest since June 2012, figures from theLabor Department showed Friday in Washington. The jobless rate fellto the lowest since May 2008 as more Americans entered the laborforce and found work. Average hourly earnings climbed less thanforecast.

Construction and health care were among the industries thataccelerated the pace of hiring last month as the economy emergedfrom temporary setbacks that included bad weather and a labordispute at West Coast ports. Such job growth and steadily risingwages may keep the Federal Reserve on track to raise its benchmarkinterest rate later this year.

“The pace of employment is quite encouraging,” said GregoryDaco, head of U.S. macroeconomics at Oxford Economics USA Inc.,whose payrolls forecast of 221,000 was among the closest in aBloomberg survey. “Wage growth is accelerating, but it’s quitegradual, more gradual than we would expect in a market wherethe unemployment rate is 5.4 percent.”

Stock-index futures advanced and yields on Treasury securitiesfell after the report, with the contract on the Standard &Poor’s 500 Index expiring in June rising 0.7 percent to 2,099.3 at8:40 a.m. in New York. The yield on the benchmark 10-year Treasurynote dropped to 2.14 percent from 2.18 percent late on May 7.

Previous Months

The median forecast in a Bloomberg survey of 96 economistscalled for a 228,000 advance, with estimates ranging from gains of175,000 to 327,000. March was revised from a previously reported126,000 advance. Revisions to prior reports subtracted a total of39,000 jobs from overall payrolls in the previous two months.

To calculate the data, the Labor Department surveys businessesfor the pay period that includes the 12th of the month. The spanbetween the agency’s April and March employment surveys was fiveweeks, rather than the typical four.

The participation rate, which indicates the share of working-agepeople who are employed or looking for work, increased to 62.8percent from 62.7 percent in March, which matched the lowest since1978.

Hourly Earnings

Wage growth remains limited, with average hourly earnings rising0.1 percent in April after a revised 0.2 percent gain that wasweaker than initially reported. Compared with a year earlier,hourly pay was up 2.2 percent last month, less than the Bloombergmedian estimate of 2.3 percent.

The average work week for all employees held at 34.5 hours.

Construction companies took on 45,000 workers in April, thebiggest gain since January 2014. Employment in health servicesincreased 55,600 in April, the strongest increase in fivemonths.

Michele Natale, 54, a licensed practical nurse who’s beenlooking for steady employment for a year, said she’s relieved to bestarting a new, full-time job next week with Blue Cross BlueShield. The work couldn’t come at a better time, as there’scurrently “not enough money to pay rent, no money for food, notmoney for gas -- it’s been horrible,” she said.

When a former manager helped her find the job, “I was elated,because the benefits are good, and the money is phenomenal for downhere,” said Natale, who lives in Flagler Beach, Florida. “I justfeel very fortunate, especially because of my age.”

Oil Industry

The slowdown in employment tied to cheaper oil prices persistedin April, the Labor Department’s report showed. The miningindustry, which includes oil extraction and services, lost 15,000jobs, the most since May 2009.

Job growth in leisure and hospitality employment, which climbedby 17,000 last month, was restrained by a 7,100 decrease inpayrolls at hotels. Employment at restaurants rose 26,000.

Fed Chair Janet Yellen and her colleagues will use the data tohelp them parse the strength of the economy as they considerraising interest rates for the first time since 2006. Officials,who dropped a promise in March to be patient on raising rates, saythey can act at any policy meeting, beginning with their gatheringon June 16-17. Most expect them to move later this year.

Fed’s Lockhart

“The report comes at a time in which I, for one, at least amvery tuned in to what signals the economy is throwing off,” FederalReserve Bank of Atlanta President Dennis Lockhart told reporters inBaton Rouge, Louisiana, on May 6. “I view it as a very importantone to tell us about the growth momentum in the economy.”

The economy ground to a near-halt in the first quarter, weigheddown by cheap oil, a stronger dollar, labor-related delays at WestCoast ports and rough winter weather in parts of the country. Fedpolicy makers have said some of the headwinds holding back the U.S.will probably fade and give way to “moderate” growth.

Gross domestic product rose at a 0.2 percent annualized rateafter advancing 2.2 percent in the prior quarter, CommerceDepartment data showed last month. Household spending, the biggestpart of the economy, advanced at a 1.9 percent pace.

Comcast Hiring

Companies including Comcast Corp. are creating jobs to capturemore of those consumer dollars. The biggest U.S. cable- TV providerwill create more than 5,500 jobs during the next few years toimprove consumer service, with three new customer- support centersset up in New Mexico, Washington and Arizona, the company said in aMay 5 statement.

While more jobs and rising wages will be a boost to consumers,profits will probably suffer if productivity fails to pick up.Companies have been hesitant to invest in new equipment, and risinglabor costs without offsetting increases in efficiency can hurtearnings.

--With assistance from Chris Middleton in Washington.

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