U.S. April Jobless Rate Rose to 4.5%; 223,000 Jobs Eliminated
By Siobhan Hughes
Washington, May 4 (Bloomberg) -- The U.S. economy lost more jobs in April than at any time in the last decade and the unemployment rate rose to the highest in 2 1/2 years, a government report showed.
The jobless rate increased more than expected to 4.5 percent -- the highest since October 1998 -- from 4.3 percent in March, the Labor Department said. Payrolls plunged 223,000 after declining by 53,000 a month earlier.
Manufacturers eliminated jobs for the ninth straight month and employment at services businesses fell for the first time since July 2000. That suggests a slump that started in manufacturing may be spreading to other parts of the economy and that growth may be slow to pick up.
``Weakness in the economy is broadening out,'' said William Dudley, director of U.S. economic research at Goldman, Sachs & Co., before the report. It ``implies a greater recession risk because when the labor market weakens sharply you have to worry about consumers pulling back on their spending.''
The statistics also help explain why Federal Reserve policy makers surprised investors by reducing interest rates last month, the fourth time this year, and warned the economy may weaken further. Today's report suggests central bankers may lower rates by their next meeting May 15.
Analysts had expected a jobless rate of 4.4 percent in April and an increase of 20,000 jobs. The last time the unemployment rate rose for two straight months was May-June 1992. The April payroll decline was the largest since February 1991 when 259,000 jobs were eliminated.
Job Cut Announcements
Job cut announcements have been grabbing headlines this year as companies seek to preserve profits. In April alone, JDS Uniphase Corp., the biggest maker of parts used in fiber-optics equipment; Agere Systems Inc., the semiconductor unit being spun off from Lucent Technologies Inc., and Texas Instruments Inc., whose chips run two-thirds of the world's cellular phones, announced layoffs.
Up until April, manufacturing has borne most of the brunt of the economic slowdown. Factories lost 104,000 jobs in April -- the most since August -- after shedding 81,000 positions in March. Yesterday, Newell Rubbermaid Inc., the maker of Calphalon cookware, said it would eliminate 3,000 jobs over the next three years after earnings slumped.
April services employment -- which includes government hiring -- fell 59,000 after rising 10,000 a month earlier. Last month's decrease was the first and largest since a 96,000 drop in July.
Help Supply Services
Help supply services employment dropped 108,000 in April. Job cuts also occurred in general merchandise, apparel, building materials and furniture stores.
Employment at financial services firms rose 8,000 in April after rising 18,000 in March. Construction jobs fell 64,000 in April after rising 16,000 in March. The April decrease, reflecting weaker hiring than normal during the spring building season, was the first since December.
Meantime, the pool of available workers -- which combines the number of unemployed job seekers, plus those not looking for work in the last 12 months who said they would take a job -- rose to 10.8 million in April from 10.3 million in March.
The Labor Department also said:
-- The percentage of the U.S. population holding jobs fell to 64 percent in April from 64.3 percent in March.
-- Average weekly hours worked held at 34.3 in April. Manufacturing overtime held at 3.8 hours in April.
-- Average weekly earnings rose to $487.75 during April from $486.03 in March.
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.
Hourly Earnings
Meantime, workers' average hourly earnings rose 0.4 percent, or 5 cents, in April, after a 0.4 percent increase in March.
Among blacks, the unemployment rate fell to 8.2 percent from 8.6 percent in March. The jobless rate for Hispanics rose to 6.5 percent from 6.3 percent.
For teenagers, unemployment rose to 14.2 percent from 13.8 percent in March. The jobless rate for women rose to 3.8 percent in April from 3.6 percent.
Many chief executives have expressed concern that they may have to lay off more workers. A recent Conference Board survey found that the share of executives who expected a decrease in employment rose in the first quarter to more than 50 percent during the first three months of 2001, up from 22 percent a year ago. About 19 percent of respondents anticipated an increase in employment levels in their industries, down from 34 percent last year.
Cost savings are an impetus for the job cuts. Rohm & Haas Co., a maker of specialty chemicals, on Wednesday said it expected to save at least $200 million by the end of 2002 by firing as many as 1,260 employees. The Philadelphia company has been hurt by rising energy costs and slowing sales. |
