Seiyuuki
05-06-2005, 02:27 PM
U.S. Economy Added an Unexpected 274,000 Jobs in April
By JENNIFER BAYOT
Published: May 6, 2005
The nation's job market expanded at an unexpectedly fast pace last month, the government reported today, and the increased hiring hints that the economic slowdown reflected in other recent data may be no more than a pause.
The Labor Department said the economy added 274,000 jobs outside the farming sector in April, the fifth-largest gain in five years. Wall Street had expected an increase of 174,000 jobs, according to a survey by Bloomberg News.
The government also revised upward the payroll figures for March by 36,000, to 146,000, and those for February by 57,000, to 300,000.
Together with declining fuel prices, the report and revisions "suggests that the recent soft patch in the economy could prove to be short-lived," said David Greenlaw, chief United States fixed-income economist at Morgan Stanley.
The unemployment rate remained unchanged at 5.2 percent, compared with 5.5 percent on average in 2004.
Louis Crandall, chief economist at Wrightson ICAP, a bond market research firm, said that because the job improvement was not concentrated in any one sector, "that gives you a little more confidence in the numbers." But, he added, "at the same time, it doesn't entirely eliminate the other, broader concerns that the headwinds of higher energy costs and rising interest rates may slow growth in the middle part of this year."
The immediate reaction in the both the stock and bond markets implied that investors would need more strong data to be convinced that the soft patch has passed.
Stocks were only up modestly, with the Dow Jones industrial average up 42.41 points, or 0.4 percent, to 10,382.79 by late morning. Bond prices fell and yields, which move in the opposite direction, rose because of the signs of stronger growth. But yields are still quite low. The yield on the Treasury's 10-year note was at 4.24 percent in morning trading, up from 4.15 percent late Thursday, but still well below the recent high of 4.64 percent in March.
The surge in April adds momentum to a job recovery that has been under way, often in fits and starts, for the past two years. Although other months have surged only to sputter later, the trend tracked in today's numbers suggests that companies may again be willing to invest and hire.
The hiring in April was widespread, with notable gains in construction, food services and health care.
The average workweek, which tends to grow longer before companies seek new workers, expanded by 12 minutes, to 33.9 hours in April. In addition, the number of unemployed workers who had paused their job searches because no one seemed to be hiring, fell to 393,000.
The increase in hiring may prop up consumer spending, which has fueled much of the economy's growth in recent years and accounts for two thirds of economic activity. Average hourly wages, a sign of workers' bargaining and spending power, rose 5 cents in April, to $16.
The leisure and hospitality industry experienced the largest gain in April, adding 58,000 jobs, mostly at hotels and restaurants. Construction posted the next largest increase, at 47,000 jobs. Health care and social assistance services added 28,000 jobs, mostly at outpatient clinics.
The weakest growth was wholesale trade, which gained fewer than 5,000 jobs, and in natural resources work, although mining gained 8,000 jobs, thanks largely to oil- and gas-related operations.
Meanwhile, manufacturing and utilities lost jobs. The manufacturing workweek and overtime were little changed.
When the Federal Reserve raised short-term interest rates on Tuesday to 3 percent, it said that "spending growth has slowed somewhat," but seemed reassured that, "labor market conditions, however, apparently continue to improve gradually."
Mr. Greenlaw, in his report to clients, said that he expected that the Fed would continue "a gradual pace of tightening over the next several meetings."
The Fed has raised short-term rates eight times since last June.
Text: Unemployment Report (http://bls.gov/news.release/empsit.nr0.htm)
© 2004 The New York Times Company. Reprinted by Permission.
By JENNIFER BAYOT
Published: May 6, 2005
The nation's job market expanded at an unexpectedly fast pace last month, the government reported today, and the increased hiring hints that the economic slowdown reflected in other recent data may be no more than a pause.
The Labor Department said the economy added 274,000 jobs outside the farming sector in April, the fifth-largest gain in five years. Wall Street had expected an increase of 174,000 jobs, according to a survey by Bloomberg News.
The government also revised upward the payroll figures for March by 36,000, to 146,000, and those for February by 57,000, to 300,000.
Together with declining fuel prices, the report and revisions "suggests that the recent soft patch in the economy could prove to be short-lived," said David Greenlaw, chief United States fixed-income economist at Morgan Stanley.
The unemployment rate remained unchanged at 5.2 percent, compared with 5.5 percent on average in 2004.
Louis Crandall, chief economist at Wrightson ICAP, a bond market research firm, said that because the job improvement was not concentrated in any one sector, "that gives you a little more confidence in the numbers." But, he added, "at the same time, it doesn't entirely eliminate the other, broader concerns that the headwinds of higher energy costs and rising interest rates may slow growth in the middle part of this year."
The immediate reaction in the both the stock and bond markets implied that investors would need more strong data to be convinced that the soft patch has passed.
Stocks were only up modestly, with the Dow Jones industrial average up 42.41 points, or 0.4 percent, to 10,382.79 by late morning. Bond prices fell and yields, which move in the opposite direction, rose because of the signs of stronger growth. But yields are still quite low. The yield on the Treasury's 10-year note was at 4.24 percent in morning trading, up from 4.15 percent late Thursday, but still well below the recent high of 4.64 percent in March.
The surge in April adds momentum to a job recovery that has been under way, often in fits and starts, for the past two years. Although other months have surged only to sputter later, the trend tracked in today's numbers suggests that companies may again be willing to invest and hire.
The hiring in April was widespread, with notable gains in construction, food services and health care.
The average workweek, which tends to grow longer before companies seek new workers, expanded by 12 minutes, to 33.9 hours in April. In addition, the number of unemployed workers who had paused their job searches because no one seemed to be hiring, fell to 393,000.
The increase in hiring may prop up consumer spending, which has fueled much of the economy's growth in recent years and accounts for two thirds of economic activity. Average hourly wages, a sign of workers' bargaining and spending power, rose 5 cents in April, to $16.
The leisure and hospitality industry experienced the largest gain in April, adding 58,000 jobs, mostly at hotels and restaurants. Construction posted the next largest increase, at 47,000 jobs. Health care and social assistance services added 28,000 jobs, mostly at outpatient clinics.
The weakest growth was wholesale trade, which gained fewer than 5,000 jobs, and in natural resources work, although mining gained 8,000 jobs, thanks largely to oil- and gas-related operations.
Meanwhile, manufacturing and utilities lost jobs. The manufacturing workweek and overtime were little changed.
When the Federal Reserve raised short-term interest rates on Tuesday to 3 percent, it said that "spending growth has slowed somewhat," but seemed reassured that, "labor market conditions, however, apparently continue to improve gradually."
Mr. Greenlaw, in his report to clients, said that he expected that the Fed would continue "a gradual pace of tightening over the next several meetings."
The Fed has raised short-term rates eight times since last June.
Text: Unemployment Report (http://bls.gov/news.release/empsit.nr0.htm)
© 2004 The New York Times Company. Reprinted by Permission.