The april employment report from Bloomberg:
Fri, 05 May 2000, 10:43pm EDT
U.S. Economy: April Jobless Rate 3.9%, a 30-Year Low (Update4)
By Vince Golle
Washington, May 5 (Bloomberg) -- The U.S. unemployment rate
fell to a 30-year low of 3.9 percent in April as the record
economic expansion kept pulling in workers and boosted their
earnings, government figures showed today.
The unemployment rate fell to its lowest since January 1970
from 4.1 percent in March, the Labor Department said. Businesses
added 340,000 jobs during April, led by the biggest jump at retail
establishments such as restaurants and grocery stores in 12 years,
after a gain of 458,000 jobs a month earlier. Average hourly
earnings rose 0.4 percent, topping March's 0.3 percent rise.
``There's enough momentum in the economy'' for the jobless
rate to fall as low as 3.7 percent by September, said William
Sullivan, an economist at Morgan Stanley Dean Witter in New York.
That would return it to a level last seen in the 1960s before a
spurt in Vietnam War-related inflation contributed to a recession
at the end of the decade.
President Bill Clinton also noted that it is the lowest
peacetime unemployment since 1957. ``That was the year the Dodgers
last played ball in Brooklyn,'' he said.
Stocks rose and Treasury securities fell following the jobs
report, which heightened concerns Federal Reserve policy-makers
may raise the overnight bank lending rate by a half percentage
point to slow the economy and keep inflation from accelerating.
``This report has to give the Fed the willies,'' said Scott
Brown, an economist at Raymond James & Associates in St.
Petersburg, Florida. ``The numbers are too strong for the Fed's
liking and it's a clear sign that growth is beyond a sustainable
pace.''
Consumer Borrowing Rises
Central bankers next meet on May 16, and analysts are
unanimous that they will raise interest rates for a sixth time
since June. If the increase is a half point, that would bring the
overnight bank rate to 6.5 percent, the highest in more than nine
years.
Consumer borrowing rose in March, capping a quarter in which
debt grew at the fastest pace in four years, the Fed said in a
separate report. Borrowing rose by $9.1 billion after increasing
by $11.5 billion in February. For the entire quarter, borrowing
rose at an 11.2 percent annual rate, the fastest pace since
11.4 percent in the final quarter of 1995, according to the Fed.
Labor demand has been so strong it's hindering the record
economic expansion, now in its 10th year, companies have told the
Fed. Lack of workers ``continued to hamper overall economic
growth,'' the Fed said in its latest regional economic survey
released this week. In addition, ``there were more frequent
reports of intensifying wage pressures as shortages of workers
persisted in all Districts,'' the report said.
That has Fed officials increasingly concerned. ``The balance
of aggregate demand and sustainable supply today and the distinct
possibility that labor and product markets will tighten further
suggest an unacceptable risk of overheating and, therefore, higher
inflation in the future,'' Fed Governor Laurence Meyer said during
a speech last month in Toronto.
Black, Hispanic Unemployment
Today's report suggested companies may find it more difficult
to find workers. The available labor pool -- combining the number
of unemployed job seekers, plus those not looking for work in the
last 12 months who said they would take a job -- fell to 9.9
million in April from 10.3 million in March. And the share of the
population holding jobs rose to a record 64.9 percent.
The unemployment rate for blacks fell to a record low of
7.2 percent in April from 7.3 percent a month earlier. The jobless
rate for Hispanics decreased last month to 5.4 percent, also the
lowest on record, from 6.3 percent in March.
Teenage unemployment fell to 12.7 percent from 13.3 percent
in March, while the jobless rate for women fell to 3.5 percent in
April from 3.6 percent in March.
The Nasdaq Composite Index rose 97 points, or 2.6 percent, to
3816.81. The Dow Jones Industrial Average rose 165 points, or
1.6 percent, to 10,577.86. The Treasury's 10-year note fell 9/16
point, pushing up its yield 8 basis points to 6.50 percent.
Construction Jobs Fall
April services employment rose 380,000, including a 107,000
increase in government hiring. Retail employment rose 119,000, the
most since 128,000 jobs were added in February 1988. That included
an 80,000 increase at restaurants and bars, and a 20,000 increase
at food stores. The Census Bureau added 73,000 temporary workers
last month to help tabulate the 2000 census.
The Census Bureau needs at least 500,000 new employees to
help carry out its population count, which started Jan. 20. While
the goal is to hire 500,000 people for temporary jobs, there are
860,000 openings. Some people are expected to fill more than one
opening.
The construction industry lost 55,000 jobs in April after a
90,000 increase a month earlier. Factories added 11,000 jobs,
following declines of 5,000 in March and 10,000 in February.
Job gains have kept incomes rising and confidence indexes
close to a record high, providing the wherewithal for consumers to
keep on spending. Increased demand is why businesses are
continually searching for new employees.
``All About Growth''
NCR Corp., a computer and software company and No. 1 maker of
automated teller machines, said it will expand its workforce
3 percent this year to boost service offerings, the Dayton, Ohio
company said last week. Most of the new employees will install and
run large databases and maintain ATMs. The rest will aid NCR in
marketing and selling products.
``We need more sales and marketing people,'' said Lars
Nyberg, NCR's chief executive. Services are ``becoming more and
more important as the ultimate competitive weapon for winning the
deals. This is all about growth.''
Labor expenses represent about two-thirds of the cost of
doing business. Shortages increase the possibility companies will
have to offer more pay or larger bonuses to attract employees.
Companies may then try to charge more to their customers, and that
could accelerate inflation, making the labor picture a concern for
the Fed.
The government's monthly job growth figures are based on
statistics provided by businesses, while the unemployment rate is
based on a survey of U.S. households.
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Best Regards, J.T. |
