Fewest New Jobs In More Than Two Years

Government Says Job Losses Spread Into Retailing, Financial Services; Jobless Rate 4.5%

(CBS/AP)  The nation's unemployment rate edged up to 4.5 percent in April as cautious employers added the fewest new jobs in more than two years, signaling that the labor market is starting to feel some of the strain of the sluggish economy.

The fresh employment picture provided by the Labor Department on Friday showed that payrolls grew by just 88,000 last month as job losses spread beyond manufacturing and construction and into retailing and financial services. Workers' paycheck also grew more slowly.

The new tally of jobs added to the economy was the fewest since 65,000 jobs were added in November 2004. The rise in the unemployment rate, however, was slight compared with March's 4.4 percent rate — which had matched a five-year low. Taken together the figures suggest the labor market may be cooling a bit — but not collapsing — as the national economy makes its way through a soft patch.

However, 4.5 percent unemployment still indicates a pretty strong economy, Peter Sperling, professor of finance and economics at Touro College, told CBS News' Dianne James. "The Federal Reserve is not going to stop worrying about inflation pressures with a four-and-a-half percent unemployment rate," he said.

Economists were predicting the unemployment rate would nudge up to 4.5 percent. However, they expected job growth to be a bit stronger, with employers adding around 100,000 new jobs to their ranks. Even with the fractional rise in the overall rate, joblessness in the 4 percent to 5 percent is relatively low by historical standards.

The new report also showed that job gains in February and March turned out to be a bit weaker than previously reported.

Employers added 90,000 positions in February, versus the 113,000 reported last month. Payrolls grew by 177,000 in March, slightly less than the 180,000 previously reported.

Workers' wages grew more slowly.

Average hourly earnings rose to $17.25 in April, a 0.2 percent increase from March. Economists were expecting a modest 0.3 percent rise. Over the past 12 months, wages grew by 3.7 percent, the slowest annual increase in a year.

Wage growth is important for worker and supports consumer spending, a vital ingredient to the economy's good health. But a rapid pickup — if not blunted by other economic forces — can fan fears about inflation. The slower growth in wages could ease Federal Reserve fears that inflation might not recede as they have predicted.

Against that backdrop, the Federal Reserve is expected to leave a key interest rate at 5.25 percent when it meets next Wednesday. The rate hasn't budged since last August. Before that the Fed had boosted rates for two years to ward off inflation.

"Four-and-a-half percent means that there's no need to stimulate the economy, so they're certainly not going to cut interest rates, so interest rates are likely to stay where they are for some time," said Sperling.

The labor market weakness in April reflected job losses in construction, manufacturing, retailing and financial services. Health care and education, leisure and hospitality, government and various professional and business services were among the sectors adding positions.

The length of workers' job hunt was a bit longer.

The average time the 6.8 million unemployed people spent in their job searches was 17.1 weeks in April, compared with 17.3 in March.

The economy in the January-to-March quarter grew at a feeble pace of 1.3 percent, the weakest in four years. It's the most up-to-date figure on gross domestic product, the best barometer of the country's economic fitness.

Economists predict the economy did better in the current April-to-June period — in the 2 percent range — which would still be considered sluggish. Growth is expected to pick up in the second half of the year. Still, the unemployment rate is expected to climb and reach close to 5 percent by year end.

Federal Reserve Chairman Ben Bernanke believes the economy will avoid falling into a recession this year, although his predecessor, Alan Greenspan, has put the odds at one in three.

[nixonflower]

The fat cats are happy. There overseas operations are paying off. Leaving the middle class in the dirt. Thats what is driving this "record" economy. The dollar is worth half the pound. Europes dow just passed ours for the first time since before WW1, savings is at a record low for a family. Yet everything is supposed to be fine. There isnt a loss in my manufacturing job. Because I'm going from assembling autos to assembling burgers.

[nixonflower]

There never seems to be an end. Part of Hersheys is going to Mexico. Another icon.
My auto plant closed down 2 years ago. I think I would have liked a 401k now instead of relying on the traditional 30 year retirement. 24 years and I get nothing.

[zootallures2]

No matter what, just be happy you don't live in one of the other countries the US controls. Or even worse, one that it is in the process of controlling.

[gkc99]

Guess the unemployed could apply for a job with Halliburton--they've done pretty well under the Bushit presidency--but wait! Those loyal patriots moved to Dubai. Too bad, Texas. Maybe the Mexicans can show you how to pick tomatoes.

[drummer94]

My 25 year automotive related job went to Canada and Mexico in 2002. Thanks NAFTA. I have had one real job since. For six days. In a gas station that usually hire only broads. Good thing I,m resourceful. Wanna buy some............

[sjc_1]

There have been half as many jobs created and those created are low paying, no benefit "McJobs".

The one thing people do not realise about the unemployment "statistic" is that it is a survey, done house to house. It is NOT a scientific computer database driven from the employment roles.

Those that have given up looking for work after years of disappointment are not considered unemployed. That could be millions of people since 2002.

[bildooreilly]

Just tell the feds you're an illegal mexican and they'll start sending you social security checks.

[maiingan]

The low unemployment rate doesn't matter - unless you're in it, or for many who've run out of unemployment compensation, literally not counted as unemployed at all. The problem with all these pundits, officials, etc. talking about this is that they've all got high-paying jobs, and haven't been unemployed for a long time. We need a new WPA to end long-term unemployment.

[antoniof123]

I have figured it out the Republicans that are happy with the way things are are either the rich or the stupid poor. I got my raise this year it did not cover the cost of my health insurance increase. Way to go with the trickle down theory Republicans at this rate we will all be working for China in 2 more years keep it up morons.

[charlemaine1]

Keep shopping at wal-mart. It is evil for this country with a capital E.

"...if we keep 'em so poor, they'll HAVE to shop there and put all the local retailers out of biz."

way to go for the american way...boo-yah!

IMHO

[infidel_us]

The HIGHEST rate of People that have NO HEALTH CARE and the LOWEST standard of LIVING in the G-7... Great job JERKS!!
Posted by skyk at 10:26 AM : May 04, 2007

Quick....better end it all now, before you have to suffer any further! :) I'm sure there's a nice socialist country (France) that would love it if you moved there. Can I buy you a one way ticket?

[notblue]

Typical CBS political dribble, the U.S. has not only for the past 6 years seen the lowest unemployment rates in history but we enjoy the lowest unemployment rate in the industrialized world. For CBS it's all about political perspective and who is in the white house.

[rharrin1]

There are always members of society who are in a state of "flux"...changing jobs, between jobs, etc.

Posted by Infidel_US at 10:27 AM : May 04, 2007

In a state of "flux" laid off, looking for a new job,etc.

[condumism]

Very bad news for the Fascist GOPigs, now nothing more than a regional party of hypocrits, occupying 14 states, 11 of which are the original Confederacy, plus Kansas, Utah, and Wyoming. These same states are the epicenter of hypocrisy in the USA, dumber than nails, and fascist pigs toboot

[beanerman4]

before anyone else notices, I meant
"January 2001". Just know it has been a long time.

I also am working two jobs to make ends meet. Neither pays that well because of the economy here. So I guess your right, you can find them but they are lower paying and you have to work twice as hard for less.

[rharrin1]

Keep up the left-wing propaganda and keep PROPING up your pals in our DO-NOTHING CONGRESS American wouldn't expect anthing less.
Posted by perception5 at 10:33 AM : May 04, 2007

And just what did your rubber stamp congress do for this country?

[rharrin1]

We have been in a downward spiral since about January, 2000; not so coincidentally the time King George, the Decider, started his reign.

Posted by beanerman4 at 10:50 AM : May 04, 2007

The mexicans got the jobs or the jobs were exported.

[blindersoff]

there are jobs, I happen to have TWO of them. Wages are the same as a few years ago, but did anyone notice that milk and gas keep going up. If you are independently wealthy and Republican, I bet you are doing fine, and no the Mexicans are not "taking my job", and yes I do have a college degree, but still need one white collar (full time 9-5) and one part time (blue collar 20-30 hours) every week to make ends meet in Charlotte, NC. Let's be honest people, the economy is only great for those already with money. It is a fact that there a record number of millionaires and that the gap between the have's and have nots have grown excessively in the last 6 years.

[heresmy2cent]

Walmart must have decided to cut back on building more stores.

[beanerman4]

Obviously, so far, no one from Michigan has posted here.

We have been in a downward spiral since about January, 2000; not so coincidentally the time King George, the Decider, started his reign.

I mean it really has stunk here in Michigan for a long, long time. There are no jobs. Our state is almost bankrupt, with school funding now being cut $129 per student. People are leaving our state in droves. We lead the nation in foreclosures and bankruptcies. Homes have plummeted in value and are not selling; and not just in the last few months or so, but over six long years.

I'd like to here from some others here in Michigan, now is your chance to voice on this.
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