Employment Holds Steady National Payrolls Expanded By Only 2,000 Jobs Last Month
The nation’s unemployment rate dipped to a 14-month low of 5.4 percent last month, giving President Clinton fresh election-year evidence of an improving economy. Republicans focused on big jobs losses in construction and manufacturing.
The news at first lifted spirits on Wall Street, but stocks closed down for the day, reflecting continued weakness in the bond market. The Dow Jones industrial average lost 20.24 points to finish at 5,478.03.
Still, Friday’s performance was calm compared with Thursday, when stocks lost nearly 77 points and bond prices plunged as well on fears that faster-than-expected economic growth in the first quarter would prompt the Federal Reserve to soon start raising interest rates.
“After all the angst about accelerating economic activity, April employment turned out to be basically flat,” said Bruce Steinberg, economist at Merrill Lynch in New York. “The Fed is highly unlikely to tighten monetary policy for the foreseeable future.”
After racing ahead with increases of 178,000 in March and a 12-year high of 631,000 in February, non-farm payrolls expanded by just 2,000 in April.
The White House noted that April marked the 20th straight month unemployment has been below 6 percent, but Republicans stressed the job losses and the big slowdown in payroll jobs.
Republicans argued that the unemployment report showed the economy is still struggling, especially in manufacturing, where April’s loss of 17,000 jobs brought the total decline in factory workers to 319,000 over the past year.
The small 2,000-worker gain in payroll jobs was the poorest showing since January.
Laura Tyson, head of the president’s National Economic Council, argued that the best way to view the labor force this year was to average the monthly changes. Doing that produces an average monthly increase of 166,000.
In a second report Friday, the Commerce Department said that Americans enjoyed a brisk increase of 0.5 percent in their incomes in March but boosted spending at an even faster pace of 0.6 percent.
It was the big surge in consumer spending that propelled overall economic growth to an advance of 2.8 percent in the first quarter.
The slowdown in job growth in April reflected not only the drop in manufacturing jobs but a huge decrease of 53,000 construction jobs.
The Labor Department said the manufacturing job loss would have been three times larger had it not been for a return of striking auto workers.
Jobs in service industries were up only 20,000 in the month, far below the 125,000 average gain of the previous three months.
xxxx Charting the trend The 5.4 percent unemployment rate for April was an improvement from 5.6 percent in March and was the lowest jobless rate since February of 1995.