Layoffs Renew Recession Fears; April Job Loss Biggest in Decade
The U.S. economy shed nearly a quarter of a million jobs during April, the government reported yesterday, all but dashing hopes that the economic slowdown that began last summer had nearly run its course.</br></br>The unemployment rate rose to 4.5 percent from 4.3 percent in March, with 6.4 million Americans now out of work and looking for jobs. Most forecasters expect the jobless rate to rise to 5 percent by the end of the year.</br></br>April's decline in payroll employment, the second in a row, was the biggest monthly drop since the last recession a decade ago. Many analysts and policymakers worry that continuing corporate layoffs and hiring freezes will cause consumers to pull back sharply on their spending, tipping the economy into recession.</br></br>"The fallout from a deteriorating job market on consumer spending hasn't kicked in yet, and when it does, it won't be pretty," said Allen Sinai, a leading economic forecaster.</br></br>However, investors saw in the news an encouraging sign that businesses were moving aggressively to cut costs, trim excess capacity and return quickly to profitability. Stock prices rose on both the Nasdaq Stock Market and New York Stock Exchange [see story, Page E1].