Unemployment report:
cnnfn.cnn.com
NEW YORK (CNNfn) - The U.S. unemployment rate rose to its highest level in
20 months in March as job growth stalled, the government said Friday, the
latest signs of a slowdown in the world's largest economy.
Businesses cut 86,000 jobs outside the farm sector last month after adding a
revised 140,000 jobs in February, the Labor Department said.
The unemployment rate edged up to 4.3 percent from 4.2 percent in February.
The rate hasn't been this high since July 1999, while the reduction in payrolls
was the largest since the end of 1991.
Wall Street economists had forecast that the economy created about 70,000
jobs last month. Average hourly wages -- a key gauge of inflation -- rose 6
cents, or 0.4 percent, to $14.17 an hour, a shade above Wall Street forecasts.
The government said 135.8 million people were employed in March compared
with 141.9 million in February.
Companies have been trimming jobs by the thousands in recent months as the
economic slowdown has dampened customer demand, stranding companies
with extra inventory. That has forced companies across most sectors to cut
back on production and trim costs.
The report comes little more than two weeks after the Federal Reserve cut
interest rates aggressively for the third time this year in a bid to keep the
United States from slipping into recession.
Bond prices rose but stock futures fell after the report, pointing to a lower start
on Wall Street.
The report raised speculation among analysts about whether the Fed will
announce an inter-meeting interest rate cut, before its next scheduled meeting
in May.
"I think these numbers have the potential to drive the Fed to do an
inter-meeting cut," Anthony Chan, chief investment strategist with Banc One
Investment Advisors told CNNfn's Before Hours Friday. "The economy is
slowing down, and I think we'll see more of this before it's over."
However Chan did note that the Fed would likely look to for other economic
signs -- such as consumer confidence, prices and retail sales -- before making
any decisions on an inter-meeting move. He said the increased unemployment
rate coupled with a slight rise in average hourly earnings doesn't indicate that
the economy is in a recession.
"The unemployment rate is picking up, but it's picking up at a very slow pace,"
Chan said.
The non-farm numbers reflected losses mainly in manufacturing, services and
retail, the Labor Department said.
Manufacturing jobs were down 81,000 in March while the service sector lost
19,000 jobs. Temporary help firms lost 83,000 jobs, the Labor Department
said.
The report comes a day after a private report showed U.S. companies trimmed
more than 160,000 jobs in March, capping a four-month period in which half a
million jobs were cut. |
