IBJNews

U.S. jobless rate slips despite dismal employment report

Back to TopCommentsE-mailPrintBookmark and Share

U.S. employers added fewer workers than predicted in April, but the jobless rate unexpectedly fell as people left the labor force, adding to concern the economic expansion is cooling.

Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 gain in March that was larger than initially estimated, Labor Department figures showed Friday. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance.

Despite that, the unemployment rate fell to a three-year low of 8.1 percent while earnings stagnated.

Stocks and bond yields fell on concern a slowdown in hiring may restrain the wage growth needed to fuel consumer spending, which accounts for about 70 percent of the economy. The data support the views of Federal Reserve policy makers led by Chairman Ben S. Bernanke, who say low interest rates are needed at least through late 2014 to boost the labor market.

“We’re still very much on the recovery path, but we’ve got a huge amount of ground to make up in the labor market,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla., who accurately forecast the unemployment rate. Today’s report “is not really enough to push the Fed one way or the other.”

The Standard & Poor’s 500 Index and the NASDAQ composite index both dropped more than 1 percent in early trading Friday. The Dow Jones industrial average also was down almost 1 percent.

Transportation and warehousing, government agencies and construction all cut jobs in April. Bloomberg survey estimates ranged from increases of 89,000 to 210,000 after a previously reported 120,000 rise in March. Revisions added a total of 53,000 jobs to payrolls in February and March.

The jobs data come six months before Americans head to the polls to either re-elect President Barack Obama or choose Republican Mitt Romney, who has said White House policies have done little to help U.S. workers.

The unemployment rate was forecast to hold at 8.2 percent, according to the survey median. Estimates in the Bloomberg survey ranged from 8.1 percent to 8.3 percent. Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.

The participation rate, which indicates the share of working-age people in the labor force, fell to 63.6 percent, the lowest since December 1981, from 63.8 percent.

Private payrolls, which exclude government agencies, rose 130,000 after a revised gain of 166,000. They were projected to rise by 165,000, the survey showed.

Factory payrolls increased by 16,000, the smallest in five months and less than the survey forecast of a 20,000 increase.

Employment at service-providers increased 101,000 in April, the smallest gain since August. Construction companies cut 2,000 jobs and retailers added 29,300 employees.

The last two months may reflect a weather-related payback. Hiring probably eased following warmer-than-usual weather that pulled forward some workforce additions into the early months of the year.

“The weather was mild in January and February, and it’s very possible that hiring was pulled forward,” said Christophe Barraud, an economist and strategist at Market Securities Paris LLP, who correctly forecast the payrolls figure. “This report is not good, but we have to wait for the next one to see if the real trend is actually decelerating.”

Government payrolls decreased by 15,000. State and local governments employment dropped by 11,000.

Evan Christou, owner of Tops American Grill, Bakery & Bar in Schenectady, N.Y., said at this time he has no plans to add to his staff of 42 employees. His sales were up about 6 percent earlier this year before dropping off when gas prices went up. He said he would need to see a significant increase in sales for a sustained period before hiring more workers.

“We’re kind of consolidating and multi-tasking,” said Christou, 49. “In this market, it’s pretty much a wait-and-see attitude.”

Average hourly earnings were essentially unchanged, the weakest since August, at $23.38,the report showed. Compared with April of last year, earnings climbed 1.8 percent, matching January as the smallest in a year.

The average work week for all workers held at 34.5 hours.

The so-called underemployment rate, which includes part-time workers who’d prefer a full-time position and people who want work but have given up looking, held at 14.5 percent.

The report also showed a drop in long-term unemployed Americans. The number of people unemployed for 27 weeks or more decreased as a percentage of all jobless, to 41.3 percent.

The number of temporary workers increased 21,100. Payroll at temporary-help agencies often slow as companies seeing a steady increase in demand take on permanent staff.

Faster economic growth would help lay the groundwork for more hiring. The economy expanded at a 2.2-percent annual rate in the first quarter after a 3-percent pace the prior three months, the Commerce Department reported last week. Consumer spending grew 2.9 percent, the most in more than a year.

ADVERTISEMENT

  • Is the unemployment rate a sham?
    Does the rate only count people who are eligible and collecting unemployment payments? How do they tabulate the underemployment rate, i.e., how do they know which unemployed people would like work but have given up looking, as opposed to those such as stay-at-home parents, who don't wish to work?

    I suspect that the 63.6% participation, being the lowest since 1981, is a very telling number that should get more attention. Really? A smaller percentage of adults are in the labor force now than 31 years ago when we presumably had many fewer working moms?

    If only we had political candidates willing to take actual measures to increase employment, outside of hotels, restaurants, and the like, in this country. How long will it take before the majority understands the immense negative impacts of off-shoring the overwhelming majority of our manufacturing and production?

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Of what value is selling alcoholic beverages to State Fair patrons when there are many families with children attending. Is this the message we want to give children attending and participating in the Fair, another venue with alooholic consumption onsite. Is this to promote beer and wine production in the state which are great for the breweries and wineries, but where does this end up 10-15 years from now, lots more drinkers for the alcoholic contents. If these drinks are so important, why not remove the alcohol content and the flavor and drink itself similar to soft drinks would be the novelty, not the alcoholic content and its affects on the drinker. There is no social or material benefit from drinking alcoholic beverages, mostly people want to get slightly or highly drunk.

  2. I did;nt know anyone in Indiana could count- WHY did they NOT SAY just HOW this would be enforced? Because it WON;T! NOW- with that said- BIG BROTHER is ALIVE in this Article-why take any comment if it won't appease YOU PEOPLE- that's NOT American- with EVERYTHING you indicated is NOT said-I can see WHY it say's o Comments- YOU are COMMIES- BIG BROTHER and most likely- voted for Obama!

  3. In Europe there are schools for hairdressing but you don't get a license afterwards but you are required to assist in turkey and Italy its 7 years in japan it's 10 years England 2 so these people who assist know how to do hair their not just anybody and if your an owner and you hire someone with no experience then ur an idiot I've known stylist from different countries with no license but they are professional clean and safe they have no license but they have experience a license doesn't mean anything look at all the bad hairdressers in the world that have fried peoples hair okay but they have a license doesn't make them a professional at their job I think they should get rid of it because stateboard robs stylist and owners and they fine you for the dumbest f***ing things oh ur license isn't displayed 100$ oh ur wearing open toe shoes fine, oh there's ONE HAIR IN UR BRUSH that's a fine it's like really? So I think they need to go or ease up on their regulations because their too strict

  4. Exciting times in Carmel.

  5. Twenty years ago when we moved to Indy I was a stay at home mom and knew not very many people.WIBC was my family and friends for the most part. It was informative, civil, and humerous with Dave the KING. Terri, Jeff, Stever, Big Joe, Matt, Pat and Crumie. I loved them all, and they seemed to love each other. I didn't mind Greg Garrison, but I was not a Rush fan. NOW I can't stand Chicks and all their giggly opinions. Tony Katz is to abrasive that early in the morning(or really any time). I will tune in on Saturday morning for the usual fun and priceless information from Pat and Crumie, mornings it will be 90.1

ADVERTISEMENT