With soaring jobless claims and record-breaking corporate layoffs in April, Wall Street was looking to the April employment results to help tighten the focus on the U.S. economic recovery picture. Wall Street may now be asking: What recovery?
The answer came loud and clear, as nonfarm payroll fell sharply -- with large losses continuing in manufacturing and help supply services -- and the unemployment rate increased another 0.2% to 4.5%. The rate at which jobs are being lost is similar to the recession of 10 years ago.
"The number is certainly a lot weaker than anyone was expecting. ... We're right at the edge of the precipice and it looks like we're starting into the downward spiral,'' said Scott Brown, chief economist at Raymond James and Associates, in St. Petersburg, Florida.
According to the Labor Department's April 2001 Employment Report, total nonfarm payroll fell 223,000. The sharp decline was in striking contrast to many U.S. economists surveyed by Reuters, who were expecting a modest increase of 5,000. There was little or no growth in most industries. A closer look at the April results shows:
- Weak seasonal hiring led to a 64,000 decline in construction.
- A fifth consecutive month of losses for wholesale trade has raised its loss total over that period to 27,000.
- Employment in services was down 121,000, due primarily to a sharp drop in help supply services (108,000; 370,000 decline since September).
- Retail trade gained 22,000 jobs, after a loss of 46,000 in March.
The manufacturing industry lost 104,000 jobs in April, raising its total loss since last June to 554,000. Two-thirds of that total has come in 2001. Declines continued to be widespread:
- Industrial machinery: 16,000 in April; 52,000 for the year
- Fabricated metals: 13,000; 50,000 for the year
- Electrical equipment: 31,000; 51,000 since December
- Additional declines occurred in apparel, textiles, rubber/plastics, and printing/publishing.
At a Glance: Hours and Earnings
- For the third month in a row, the manufacturing workweek remained at 40.7 hours (one full hour higher than last year); overtime also was unchanged at 3.8 hours.
- Average hourly earnings rose another 5 cents to $14.22, following a 13-cent combined gain in February and March.
- Average weekly earnings increased 0.4% to $487.75.
- Over the past 12 months, average hourly earnings and weekly earnings have increased by 4.3% and 3.4%, respectively.
The report on May employment will be released on June 8, 2001.
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Read the latest report from the Bureau of Labor Statistics.