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Payrolls Increase, Unemployment at 4.3%
WASHINGTON (May 7) -- The U.S. economy added jobs in April at about the average monthly pace of the past three years and the unemployment rate rose to 4.3 percent, after falling to a 29-year low in March.
Last month's increase of 234,000 jobs was in line with analysts' forecasts of a gain of 242,000 jobs, Labor Department figures showed. During March, companies added a revised 7,000 jobs, fewer than the government's initial estimate of a gain of 46,000. March's jobless rate was 4.2 percent.
Labor costs were subdued. Workers' average hourly earnings, a gauge of business costs, rose 0.2 percent -- or 3 cents -- to $13.11 in April following an increase of 0.2 percent during March.
In many industries, such as construction, a dearth of qualified job applicants is hampering growth. ''There are a lot of shortages out there,'' said David Wyss, an economist at Standard & Poor's DRI in Lexington, Massachusetts, before the report. ''They would hire more workers if they could find them.''
Service-producing employment rose by 261,000 in April, after rising by 91,000 a month earlier. Manufacturing employment decreased by 29,000 last month, after falling 29,000 in March. Construction employment rose by 8,000, after falling by 53,000 in March.
Since January 1996, U.S. companies have added about 245,000 jobs every month. And the jobless rate has been below 5 percent since June 1997. In June 1992, unemployment rose as high as 7.8 percent, as the economy began to recover from the last recession.
Greenspan's Concern
The pace of job growth, which hasn't been matched by as fast an increase in pool of available workers, is one reason Federal Reserve Chairman Alan Greenspan warned yesterday that potential labor shortages could threaten the economy, now in its ninth year of growth.
''There are imbalances in our expansion that, unless redressed, will bring this long run of strong growth and low inflation to a close,'' Greenspan said in Chicago.
Bonds fell, pushing yields to their highest point in 11 months on his stated concern that the tight labor market could bring on accelerating inflation.
''At some point, labor market conditions can become so tight that the rise in nominal wages will start increasingly outpacing the gains in labor productivity, and prices inevitably will then eventually begin to rise,'' Greenspan said.
Report Details
The Labor Department also said:
·Average weekly hours worked rose to 34.5 in April from 34.4 during March.
·Manufacturing overtime decreased to 4.4 hours during April from 4.5 hours during March.
·The index of hours worked, a gauge of economic growth that combines changes in the work week and changes in payroll growth, rose to 146.8 in April from 146.4 during March.
·Average weekly earnings increased to $452.30 during April from $449.95 during March.
·The percentage of unemployed workers who voluntarily quit their jobs rose to 13.9 percent in April from 13.5 percent during March.
·The percentage of the U.S. population holding jobs decreased to 64.2 percent in April from 64.3 percent during March.
Labor Market Conditions
Services have been the driving force behind the low unemployment rate, especially businesses built around computers and information systems.
Capital One Financial Corp., the second-biggest publicly traded credit card company in the U.S., will hire 800 people in Texas this year to handle an increase in customers. Capital One, based in Falls Church, Virginia, said the new hires will include additions to the company's customer service and collections staff who will work at offices in the Dallas suburb of Irving, Texas.
Even with the growing economy and low jobless rate, labor costs have been tame, and registered the smallest increase on record in the first quarter. The government's employment cost index -- the broadest measure of wage, salary and benefit costs -- rose 0.4 percent, Labor Department figures showed April 29.
Still, many businesses are cutting and combining jobs to reduce costs. Pillsbury Co., the Diageo Plc food unit whose brands include Green Giant, Haagen-Dazs and Hungry Jack, said it's closing factories in Blackwood, New Jersey, and Lenexa, Kansas, to reduce costs. Minneapolis-based Pillsbury will close the plants, which make refrigerated, unbaked bread products, affecting 151 workers, by July 2 and transfer production to factories in Oklahoma, New Jersey and Montreal. |
