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Tuesday, 8 May 2012 00:00 - - {{hitsCtrl.values.hits}}
Reuters: US employers decreased hiring for the second straight month in April but the unemployment rate still fell to 8.1%, giving mixed messages about the economy’s strength ahead of President Barack Obama’s November re-election bid.
Employers added 115,000 workers to their payrolls last month, the Labor Department said on Friday.
The reading keeps fears alive that the US economy is losing momentum and dampens hopes that a stretch of strong winter hiring signaled a turning point for the recovery.
The unemployment rate ticked a tenth of a point lower to a three-year low, as people left the work force. The jobless rate is derived from a separate survey of households, which showed a drop in the number of jobs in April.
Still, the government revised upward its initial estimates for payroll growth in February and March by a combined 53,000. That left the six-month average of job growth at 197,000, nearly exactly where it would have been had April job growth come in as expected at 170,000.
“We’re still growing just gradually,” said Nigel Gault, an economist at IHS Global Insight in Lexington, Massachusetts.
“Hiring is coming back into line with what you would expect with sluggish growth.”
The report, which regularly sets the tone for financial markets around the world, could rattle nerves at the White House. Weak US growth and high unemployment create a formidable headwind for Obama, who entered office during the darkest days of the 2007-09 recession.
His Republican challenger, Mitt Romney, repeatedly has accused Obama of doing too little to foster job growth.
The unemployment rate, which soared to as high as 10% during Obama’s first year in the office, held near 9% for most of last year before falling sharply over the winter.
Still, it remains about 2% age points higher than its average over the last 50 years, and the US Federal Reserve thinks it probably will not post a full recovery for at least another several years.
Nevertheless, Fed Chairman Ben Bernanke said last month the central bank is providing enough support for the economy.
So far this year, the labour market has given mixed signals.
During the winter, fast growth in payrolls led many analysts to think the economy was turning a corner. Then jobs growth braked in March, fuelling fears the recovery was losing momentum.
Most economists think mild weather muddied the waters, boosting hiring in the winter but making spring look weaker because companies had pulled hiring forward.
“It’s not that there’s something wrong with the economy. Employment just got ahead of itself,” said Robert Mellman, an economist at JP Morgan in New York.
The report showed the private sector accounted for all the job gains in April, adding 130,000 new positions. Manufacturing registering another strong month, adding 16,000.
Wall Street analysts see economic growth holding at a lacklustre 2.2% annual rate in the second quarter, matching its pace in the first three months of the year.
The length of the average work week held steady at 34.5 hours in April.
