Fewer jobs added in April

88,000 new positions are created when 100,000 were expected

May 05, 2007|By Molly Hennessy-Fiske | Molly Hennessy-Fiske,Los Angeles Times

WASHINGTON -- The economy generated fewer jobs than expected in April, the Labor Department reported yesterday, but many analysts said the job market remains tight enough to drive up hiring later this year.

"Employers are going to continue to hire. They will be hiring at a slower pace this year than they were last year, but they'll keep hiring," said Nigel Gault, U.S. economist for Global Insight in Waltham, Mass. "The labor market will probably stay quite tight, and there's still going to be a problem for employers looking around for skills."

The economy added 88,000 jobs in April, fewer than the 100,000 predicted by a consensus of private economists, because of larger-than-expected job losses in manufacturing and housing-related sectors. The gain in March jobs was also revised downward yesterday to 177,000 from 180,000.

Layoffs at automakers, retailers and builders, which cut into overall job growth, have been a source of worker anxiety. Manufacturers eliminated 19,000 jobs in April, more than the 14,000 economists had expected and more than the 18,000 eliminated in March. Retailers reduced payrolls by 26,000; builders, by 11,000.

But the unemployment rate rose slightly in April, from 4.4 percent to 4.5 percent, where it has hovered since September. As a result, skilled workers, even in manufacturing, are in demand.

The jobless rate for Hispanics rose to 5.4 percent, a three-month high. The unemployment rate for blacks, however, dipped to 8.2 percent. The jobless rate remained 3.8 percent for women and 4 percent for men.

By one measure in the report, the job hunt grew longer. The median time the 6.8 million unemployed people spent in their job searches was 8.7 weeks in April, up from 8.5 weeks in March.

The Federal Reserve's most recent regional economic survey reported "tight labor market conditions" in most districts from late February to mid-April. Those tight labor markets have led to slightly better pay and benefits for many work- ers.

The new count of jobs added to the economy was the fewest since 65,000 in November 2004. The rise in the unemployment rate, however, was slight compared with March's 4.4 percent rate that matched a five-year low.

The figures suggest the employment situation is weakening a bit - but not collapsing - as the nation's economy makes its way through a soft patch. Economists do predict the unemployment rate will climb in the coming months and approach 5 percent by year end.

The Labor Department also reported that workers' average hourly earnings rose 0.2 percent in April after a 0.3 percent increase in March. Earnings were up 3.7 percent in April from a year ago, despite a slight decline in average weekly hours.

Average hourly earnings rose to $17.25 in April, a 3.7 percent increase over the past 12 months. That marked the slowest annual rise in a year. But analysts considered the increase solid, and because it probably outpaced inflation, "workers are still staying ahead," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

"Businesses have to bid up wages to get more workers. For workers that's great," said Joel L. Naroff, president of Naroff Economic Advisors in Holland, Pa.

The economy grew by a sluggish 1.3 percent annual rate for the first three months of the year, but many analysts expect growth to be closer to 2.5 percent by year's end, adding about 120,000 jobs a month.

Molly Hennessy-Fiske writes for the Los Angeles Times. The Associated Press contributed to this article.

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