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U.S. Job Market Shows Sign Of Improvement; Unemployment Rate Raises Concerns
May 8, 2009 1:27 p.m. EST
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Mayur Pahilajani - AHN News Writer
Washington, D.C. (AHN) - The pace at which the number of American employees were fired has slowed down, with only 539,000 job losses in April. However, the U.S. unemployment rate climbed to 8.9 percent, which is the highest since late 1983.
The Labor Department's data on the job losses showed that many businesses remain wary of hiring given all the economic uncertainties, despite recent rallies on Wall Street and improved earnings outlooks in different sectors.
The better-than-expected data still will be able to boost confidence among the investors to buy more stocks, increase consumer spending and help sustain the rally in the markets.
"Despite another nasty upward revision to March's figure, April came in significantly lower than expected at 539,000 against 600,000 forecast," David Morrison, CFD Market Strategist at London-based GFT, said today. "This should keep equities well-bid in the short-term, but once fully digested, this could be the last bit of good news that precedes a stock market pull-back, as traders come to believe that it is better to travel than to arrive."
The number of job lost April was the smallest decline since October when the employers cut 380,000 positions. The Labor Department has also revised job losses higher in February and March by 66,000.
The unemployment rate increased to 8.9 percent, which was in line with the expectations, from 8.5 percent in March.
The government added 72,000 jobs, mainly on temporary basis including workers hired to conduct the 2010 census, offsetting the drop in the overall private sector employment by 72 percent or 611,000 last month, which is still better than March's 80 percent decline.
A bright spot in the private sector industries was health care as it added almost 17,000 new jobs in April.
Average hourly earnings advanced just $0.01 to $18.51. That was up just 3.2% from one year ago, a sign that inflation isn't a threat.
The report showed that average hourly earnings increased by just one cent to $18.51, which was up just 3.2 percent from one year ago, indicating that inflation isn't a threat, but unemployment rate is putting pressure on it.
Individual industry data showed that goods-producing industries jobs dipped by 270,000, which include manufacturing firms that cut 149,000 jobs, pushing up the the total to 1.6 million since the start of the recession.
Construction sector lost 110,000 jobs last month, while service-sector declined by 269,000 positions. Retail trade industry slashed 46,700 jobs, followed by leisure and hospitality businesses shedding 44,000 workers.
Business and professional services companies fired as many as 122,000 employees in the last month, which is a six-figure loss for the sixth straight month.
The financial sector, which has lost trillions of dollars in writedowns, fired 40,000 people.
Temporary employment, which is considered to be a leading indicator of future job prospects, slipped by more than 62,000, but it was less than March's decline.
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