Payrolls in U.S. rose 115,000 in April; Jobless Rate at 8.1%
EMPLOYERS in the U.S. added fewer workers than forecast in April and the jobless rate unexpectedly declined as people left the labor force.
COURTESY BUREAU OF LABOR AND STATISTICS
By Shobhana Chandra Bloomberg News
WASHINGTON - Employers in the U.S. added fewer workers than forecast in April and the jobless rate unexpectedly declined as people left the labor force, underscoring concern the world’s largest economy may be losing speed.
Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 rise in March that was more than initially estimated, Labor Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance.
The jobless rate fell to a three-year low of 8.1 percent and earnings stagnated.
A slowdown in hiring as corporate optimism cools may restrain the wage growth needed to fuel consumer spending, which accounts for about 70 percent of the economy. Federal Reserve policy makers view unemployment as “elevated” and plan to hold borrowing costs low through late 2014.
“The labor market isn’t improving all that much,” Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, N.C., said before the report. “Layoffs have slowed but hiring hasn’t really picked up. The next couple of months are going to be challenging. The Fed’s caution is well-placed.”
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.
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, today’s 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.