April job losses less than expected, unemployment rate eases to 5%
Employers shed jobs in April for the fourth consecutive month, but they did so at a much slower pace than analysts expected, and the unemployment...
WASHINGTON — Employers shed jobs in April for the fourth consecutive month, but they did so at a much slower pace than analysts expected, and the unemployment rate actually improved to 5 percent, a government report said today.
Coupled with Wednesday's first-quarter economic growth numbers, which also were better than expected at 0.6 percent, the new employment statistics point to an economy that's not robust but appears safe from deep contraction.
Wall Street initially responded enthusiastically with a sharp advance this morning, sending the Dow Jones industrial average up more than 100 points, but it then backed off to notch only a 15-point gain with about 90 minutes of trading to go in New York as some investors appeared to cash in recent gains.
Employers cut 20,000 jobs in April, the Labor Department reported, well below the 80,000 expected in the consensus forecasts of mainstream economists.
The unemployment rate, derived from a different statistical survey than the payroll figures, fell to 5 percent from 5.1 percent in March. That survey, produced by the Bureau of Labor Statistics, showed more people finding employment than those who didn't.
The areas in which jobs were lost remained consistent, mainly centered in areas particularly hard hit by the housing downturn: construction, manufacturing and retail trade. Jobs were added in health care and professional and technical services.
More than 306,000 part-time workers were added to payrolls in April. That brought the national number of part-time workers to 5.2 million, inflating the overall employment rate.
"This level was 849,000 (jobs) higher than in April 2007. These individuals indicated that they were working part time because their hours had been cut back or because they were unable to find a full-time job," the Bureau of Labor Statistics report said.
The Labor Department's broadest gauge for workforce health — which includes the unemployed, marginally attached workers and those working part-time for economic reasons — rose to 9.2 percent of all workers in April from 9.1 percent in March.
In a note to investors, Nigel Gault, chief economist for forecaster Global Insight, warned that with construction and manufacturing employment "still declining sharply, hours worked down and part-time employment up, this report can't be taken as a signal that the economy is out of the recession woods."
Still, this week's growth and jobs data suggest that the economy may be finding its footing after a tumultuous half-year marked by a deep housing slump and turmoil in the credit markets.
"We have been able to withstand some very strong corrections and continue to show some growth," Commerce Secretary Carlos Gutierrez said today.
"We don't like to see jobs decline, so it's bittersweet. We're very pleased that unemployment is 5 percent. ... That continues to be low in historical standards."
Businesses are handing out pink slips as they cope with an economy that is teetering on the edge of a recession, or possibly in one already. A severe housing slump, harder-to-get credit and financial turmoil have forced people and businesses to be more cautious in their spending. And that has hurt the economy.
To help relieve credit problems, the Federal Reserve announced today that it would boost the availability of short-term loans to commercial banks to $150 billion in May from the $100 billion supplied in April. The goal is to supply a source of cash to squeezed banks so that they'll keep lending to customers.
The Fed took that action and several other moves to boost credit in coordination with the European Central Bank and the Swiss National Bank.
In other economic news, the Commerce Department reported that orders to U.S. factories rose a bigger-than-expected 1.4 percent in March, after two straight months of declines.
Material from The Associated Press was used in this report.
Copyright © 2008 The Seattle Times Company
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When vice president of Sub Pop Records Megan Jasper isn't running things at the office, she's working in her garden at her West Seattle home where she and her husband Brian spend time relaxing.