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Joblessness inches up
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May 7, 1999: 10:41 a.m. ET
April unemployment creeps to 4.3%; payrolls up 234,000; wage rise muted
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NEW YORK (CNNfn) - The U.S. unemployment rate inched up in April, to 4.3 percent, from the nearly three-decade low of a month earlier, the Labor Department said Friday.
The unemployment rate was slightly higher than the consensus forecast of Wall Street economists, who called for a match of the March rate of 4.2 percent, the lowest recorded since 1970.
The April employment report also showed an increase of 234,000 non-farm jobs, about in line with expectations. Economists surveyed by the Reuters news agency had predicted an increase of 230,000. The April increase is much higher than the revised gain of 7,000 in March; the Labor Department originally reported an increase of 46,000 last month.
Average hourly wages rose 3 cents per hour, or 0.2 percent, to a seasonally adjusted $13.11. That was about half of what experts were anticipating, and matches the 3-cent per hour pay increase recorded a month earlier. Over the year as a whole, hourly earnings grew by 3.2 percent, the smallest increase in three years, the department said.
Labor Secretary Alexis Herman said the report offers no warnings sign of any economic slowdown ahead.
"This report clearly indicates that wage gains are very much in line with productivity in our economy and that workers are sharing in that economy," she told CNNfn. "That's what you want to see."
Wall Street economists also said the report, particularly the unexpectedly tame wage element, gives little reason for the Federal Reserve to raise interest rates to tame the booming economy.
"The best way to describe this report is 'holy cow,'" said Anthony Chan, chief economist at Banc One Investment Advisors. "This is a great report. We have Alan Greenspan a little bit worried about inflation and certainly the financial markets will realize that those worries certainly continue to prove to be unfounded."
The report triggered choppy trading in the Treasury market. The bond market has been hit hard by recent selloffs, and some traders apparently were still spooked by Thursday's comments from Greenspan, the Federal Reserve chairman, about wage increases and a tight job market.
At mid-morning, the benchmark 30-year Treasury was trading up 10/32 in price, lowering the yield to 5.759 percent. The bond had been down 11/32 of a point to 92-1/32, for a yield of 5.81 percent, at 9 a.m., about half an hour after the labor data were released.
Despite the generally healthy employment picture, "the fact the bonds haven't been able to rally shows the depth of concern" in the market, said Doug Porter, a senior economist with brokerage Nesbitt Burns Inc.
For the past 12 months, the U.S. unemployment rate has been at or below 4.5 percent. The latest report showed that job creation actually picked up in April, with losses in manufacturing and mining offset by new jobs in service industries.
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Labor Department
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