Pace of US job creation slows/US added 88,000 jobs in April
Pace of US job creation slows
By Eoin Callan in Washington
Copyright The Financial Times Limited 2007
Published: May 4 2007 15:23 | Last updated: May 4 2007 21:41
US job creation slowed to its weakest pace in more than two years last month as staff cuts extended beyond the manufacturing and construction sectors to the retail trade, official figures showed on Friday.
The unemployment rate rose to 4.5 per cent from 4.4 per cent as 88,000 workers were added to payrolls, compared with an increase of 177,000 the previous month, according to the labour department.
The slowdown in job creation reflects recent economic weakness but is likely to be viewed by the Federal Reserve as a welcome sign that wage and inflation pressures are easing.
Haseeb Ahmed, an economist at JP Morgan Chase, said the heavy job losses in the retail sector were a sign of a “broad-based deceleration” in employment in the service sector. He said this would result in a “downshift” in overall job creation to a level below recent months.
The signs of weakness in service employment underlined fears about the resilience of consumer spending.
Lena Komileva, an economist at Tullett Prebon, said: “A weaker labour market as a result of the downturn in business cycle is one of the main risks to the consumer and the economy.”
But Peter Kretzmer, an economist at Bank of America, said the pace of job creation was “not sufficiently weak to arouse significant worries at the Fed”.
The figures meant “the Fed will make no significant change in its policy posture when it meets next week, expecting continued moderate economic growth while maintaining inflation as its predominant policy concern”, he said.
Mr Kretzmer said the softer job market was “consistent with the easing of labour market pressures that would be expected with recently slower GDP growth and is sought by Fed policymakers.”
Peter Morici, a professor at the University of Maryland, said: “Somewhat slower employment growth in April is consistent with the recent pickup in productivity growth and a moderately expanding economy.
“Moderate growth and rising labour productivity should keep wage inflation in check.”
Wages increased a moderate 4 cents an hour or 0.2 per cent to an average of $17.25 an hour after rising 0.3 per cent the previous month. The heaviest job losses were in the retail sector – which shed 26,000 workers – while housebuilders cut 11,000 positions and manufacturers eliminated 19,000.
David Huether, chief economist at the National Association of Manufacturers, said March was a “lacklustre month for hiring managers” as a slowdown in demand for autos “and the housing slump resonated into various industries”.
Government bond prices climbed as investors priced in a slightly greater chance of a rate cut in the coming months to bolster growth with the yield on the benchmark 10-year US Treasury note falling to 4.64 per cent from 4.67 per cent.
US added 88,000 jobs in April
By Eoin Callan in Washington
Copyright The Financial Times Limited 2007
Published: May 4 2007 15:23 | Last updated: May 4 2007 15:23
The US unemployment rate rose in April as fewer jobs were created than expected and lay-offs spread beyond the construction and manufacturing sectors, data published on Friday showed.
The unemployment rate rose to 4.5 per cent from 4.4 per cent while 88,000 workers were added to payrolls, compared with an increase of 177,000 the previous month, according to the labour department.
The weakest job creation in more than two years may undermine wage growth for workers but is likely to be viewed by the Federal Reserve as a welcome sign that inflation pressures are easing and that the economy is on track for moderate growth.
Peter Morici, a professor at the University of Maryland, said ”somewhat slower employment growth in April is consistent with the recent pick-up in productivity growth and a moderately expanding economy”.
”Moderate growth and rising labour productivity should keep wage inflation in check,” he added.
Alan Ruskin, an analyst at RBC, said the figures would ”tend to reinforce the prospect” that the Fed would leave monetary policy unchanged next month and keep interest rates on hold.
Government bond prices climbed and the yield on the benchmark 10-year US Treasury note fell to 4.64 per cent from 4.67 per cent as investors priced in a slightly greater chance of a rate cut in the coming months to bolster growth.
The heaviest job losses were in the retail sector, which shed 26,000 workers, while housebuilders cut 11,000 positions and manufacturers eliminated 19,000.
The lay-offs in construction and manufacturing were widely expected following a protracted slowdown in both sectors while the job cuts in retail were steeper than forecast.
Wages increased a moderate 4 cents per hour or 0.2 per cent after rising 0.3 per cent the previous month.
By Eoin Callan in Washington
Copyright The Financial Times Limited 2007
Published: May 4 2007 15:23 | Last updated: May 4 2007 21:41
US job creation slowed to its weakest pace in more than two years last month as staff cuts extended beyond the manufacturing and construction sectors to the retail trade, official figures showed on Friday.
The unemployment rate rose to 4.5 per cent from 4.4 per cent as 88,000 workers were added to payrolls, compared with an increase of 177,000 the previous month, according to the labour department.
The slowdown in job creation reflects recent economic weakness but is likely to be viewed by the Federal Reserve as a welcome sign that wage and inflation pressures are easing.
Haseeb Ahmed, an economist at JP Morgan Chase, said the heavy job losses in the retail sector were a sign of a “broad-based deceleration” in employment in the service sector. He said this would result in a “downshift” in overall job creation to a level below recent months.
The signs of weakness in service employment underlined fears about the resilience of consumer spending.
Lena Komileva, an economist at Tullett Prebon, said: “A weaker labour market as a result of the downturn in business cycle is one of the main risks to the consumer and the economy.”
But Peter Kretzmer, an economist at Bank of America, said the pace of job creation was “not sufficiently weak to arouse significant worries at the Fed”.
The figures meant “the Fed will make no significant change in its policy posture when it meets next week, expecting continued moderate economic growth while maintaining inflation as its predominant policy concern”, he said.
Mr Kretzmer said the softer job market was “consistent with the easing of labour market pressures that would be expected with recently slower GDP growth and is sought by Fed policymakers.”
Peter Morici, a professor at the University of Maryland, said: “Somewhat slower employment growth in April is consistent with the recent pickup in productivity growth and a moderately expanding economy.
“Moderate growth and rising labour productivity should keep wage inflation in check.”
Wages increased a moderate 4 cents an hour or 0.2 per cent to an average of $17.25 an hour after rising 0.3 per cent the previous month. The heaviest job losses were in the retail sector – which shed 26,000 workers – while housebuilders cut 11,000 positions and manufacturers eliminated 19,000.
David Huether, chief economist at the National Association of Manufacturers, said March was a “lacklustre month for hiring managers” as a slowdown in demand for autos “and the housing slump resonated into various industries”.
Government bond prices climbed as investors priced in a slightly greater chance of a rate cut in the coming months to bolster growth with the yield on the benchmark 10-year US Treasury note falling to 4.64 per cent from 4.67 per cent.
US added 88,000 jobs in April
By Eoin Callan in Washington
Copyright The Financial Times Limited 2007
Published: May 4 2007 15:23 | Last updated: May 4 2007 15:23
The US unemployment rate rose in April as fewer jobs were created than expected and lay-offs spread beyond the construction and manufacturing sectors, data published on Friday showed.
The unemployment rate rose to 4.5 per cent from 4.4 per cent while 88,000 workers were added to payrolls, compared with an increase of 177,000 the previous month, according to the labour department.
The weakest job creation in more than two years may undermine wage growth for workers but is likely to be viewed by the Federal Reserve as a welcome sign that inflation pressures are easing and that the economy is on track for moderate growth.
Peter Morici, a professor at the University of Maryland, said ”somewhat slower employment growth in April is consistent with the recent pick-up in productivity growth and a moderately expanding economy”.
”Moderate growth and rising labour productivity should keep wage inflation in check,” he added.
Alan Ruskin, an analyst at RBC, said the figures would ”tend to reinforce the prospect” that the Fed would leave monetary policy unchanged next month and keep interest rates on hold.
Government bond prices climbed and the yield on the benchmark 10-year US Treasury note fell to 4.64 per cent from 4.67 per cent as investors priced in a slightly greater chance of a rate cut in the coming months to bolster growth.
The heaviest job losses were in the retail sector, which shed 26,000 workers, while housebuilders cut 11,000 positions and manufacturers eliminated 19,000.
The lay-offs in construction and manufacturing were widely expected following a protracted slowdown in both sectors while the job cuts in retail were steeper than forecast.
Wages increased a moderate 4 cents per hour or 0.2 per cent after rising 0.3 per cent the previous month.
posted by Carlos T Mock at 8:48 AM
0 Comments:
Post a Comment
<< Home