The Economy: April's Employment Data Show Third Straight Month of Job Cuts
Companies continued to shed workers in April, and the latest data gave little indication that a significant job-market rebound is imminent.</br></br>In its latest monthly employment report, the Labor Department said U.S. nonagricultural companies eliminated 48,000 payroll jobs last month, following a combined decline of 477,000 jobs in February and March. Although the decline wasn't as steep as some had expected, other statistics in the report clearly suggested that the labor market is weaker than many economists anticipated.</br></br>For example, job losses in the manufacturing sector were enormous; jobs fell 95,000 in April. The unemployment rate, meanwhile, rose to 6% from 5.8%. Most troublesome, the average workweek fell 0.3 hour, an indication that companies don't have enough work to occupy even those employees that remain after the latest cuts. Many economists say hiring will pick up only after there is an uptick in hours worked, since companies generally try to make their existing employees work longer before they hire additional people.</br></br>In Washington, President Bush used the jump in the unemployment rate to spur members of Congress to pass a "robust" tax-cut package to stimulate the economy. Speaking to defense workers in California, the president took the issue of the rising jobless rate, a potential political liability, and turned it to his advantage. The rising unemployment rate, he said, "should serve as a clear signal to the United States Congress we need a bold economic recovery package so people can find work."</br></br>Since the jobs report shows no sign of the postwar pickup that Federal Reserve Chairman Alan Greenspan has been predicting, it will probably make some already-pessimistic Fed officials even more convinced an immediate cut in interest rates is needed. However, Mr. Greenspan told Congress last week that only "limited" information is available on the economy's performance since war uncertainty began to lift, though he already knew the job market had weakened further in April. That suggests he will counsel patience at tomorrow's central-banking meeting, rather than advocate cutting short-term rates from their current, 42-year low of 1.25%.