Hiring slows sharply with just 115K jobs added
(AP) WASHINGTON - U.S. employers pulled back on hiring in April for the second straight month, a sobering reminder that the economy remains weak. The unemployment rate fell to 8.1 percent, but only because more people gave up looking for work.
The Labor Department said Friday that the economy added just 115,000 jobs in April. That's below March's upwardly revised 154,000 jobs and far fewer than the pace from earlier this year.
The unemployment rate has fallen a full percentage point since August to a three-year low. But last month's decline was not due to job growth. The government only counts people as unemployed if they are actively looking for work.
Unemployment rate drops, job creation stagnates
In April, the percentage of adults working or looking for work fell to the lowest level in more than 30 years.
Employers added an average of 252,000 jobs per month from December through February, a burst of hiring that raised hopes the economy would accelerate. But job gains have averaged only 135,000 in the two months since then.
The slowdown will heighten fears that high gas prices and sluggish income growth are weighing on the broader economy.
Average hourly wages rose a penny in April, to $23.38. They have increased 1.8 percent over the past year, trailing the rate of inflation.
The economy must create at least 125,000 jobs a month just to keep pace with population growth. It generally takes twice that number on a consistent basis to rapidly lower the unemployment rate.
Weak job gains pose a threat to President Barack Obama's reelection. He is likely to face voters this fall with the highest unemployment rate of any president since World War II.
Economists surveyed by the Associated Press said hiring should be sufficient to push the unemployment rate below 8 percent by Election Day. The 32 economists surveyed by the AP see steady job gains averaging 177,000 a month for the rest of this year. That should be enough to lower the unemployment rate to 7.9 percent by November.
There have been some signs that hiring will improve.
The number of people seeking unemployment benefits fell last week by the most in a year, the government said Thursday. That figure was released after the government compiled its April report. But it could bode well for hiring in May.
And earlier this week, the Institute for Supply Management, a private trade group, said factory activity grew at the fastest pace in 10 months and a gauge of manufacturing employment showed that hiring jumped.
Still, service companies expanded in April at the slowest pace in four months, according to a separate ISM survey. And the group said hiring at those companies, which employ roughly 90 percent of the work force, slowed.
The economy expanded at a 2.2 percent annual rate in the January-March quarter, down from 3 percent growth in the fourth quarter. Economists polled by the AP forecast the economy will grow 2.5 percent this year. In a healthy economy, that would be considered average. But faster growth is needed to spur greater job creation.
Popular on MoneyWatch
- Amy's Baking Company could face legal 'nightmare'
- Reverse cell phone lookup service is free and simple
- Forbes names most powerful women 2013 10 Photos
- Student loan defaults rising despite a way out
- Rent the cake? Unusual tips to cut your wedding bill
- Top 10 professional life coaching myths
- GM recalling 27K Cadillac SUVs; Regulators: Wheels can fall off
- Amy's Baking Company: Post-meltdown PR campaign
Survival from the great depression was due mainly to the fighting and winning of World War 2, which would not have been possible without our manufacturing strength.
The Many manufacturing plants across America designed and used for the manufacture of every day needs such as the automobiles, washers and dryers, refrigerators-freezers, etc. were converted to produce things like tanks, airplanes, ships, guns, ammunition, uniforms, and etc. Thanks to the manufacturing base at the time,
These items were produced faster than the enemy could destroy them.
Recessions occur and deepen when consumers reduce spending, for whatever reason.
All past recessions inevitably rebounded after a few months when consumers were forced to replace worn out equipment like the earlier-mentioned automobiles, washers and dryers, refrigerators-freezers and clothing, thus past recessions, including the great depression of the 1930's, were overcome primarily because of the manufacturing capabilities we enjoyed at the time.
Rebounding from recessions now is virtually impossible because ALL of these things are now manufactured outside the country, and the wealth/savings of the working classes have all but disappeared.
Ever since Reagan started the borrow-and-spend policy in his first term in office we have been virtually living off borrowed money, and the accumulated wealth/savings of the working classes.
Every "stimulus" package ever used has been financed by borrowing money, because, not only have we lost a tremendous amount of tax revenue by the outsourcing of virtually all manufacturing jobs, but also by the unsustainable tax cuts on existing incomes in America.
The responsibility for the ultimate destruction of the great American dream was possible only because of the personal GREED of the average American voter. The same greed that allowed Wal-mart to become a worldwide powerhouse through the importing and selling of foreign-made, cheep-labor products. The same greed that has divided Americans and handed our freedom and control of the voting process to corporate America.
And, the saddest of all, the same greed that will prohibit the undoing of all that destruction.