April job growth: Slowest since '04
Fewer jobs than forecast added to U.S. payrolls as unemployment rate creeps higher; wages post only narrow gain.
NEW YORK (CNNMoney.com) -- Employers added fewer jobs in April than at anytime in more than two years, as the government's closely watched reading on the nation's labor market came short of Wall Street expectations.
The report shows a net gain of 88,000 jobs in April, down from the revised gain of 177,000 in the March report. Economists surveyed by Briefing.com had forecast a gain of 100,000 in the most recent report.
It was the smallest gain in jobs since November 2004, when there was only a 65,000 jobs gain.
Coupled with the 90,000-job gain in February this year, the economy has seen the increase in jobs fall short of the 100,000 mark in two of the three most recent months, the first time that has happened since late 2003.
Construction, which has been hit by a slowdown in home building, saw an 11,000 jobs decline in the report, while manufacturing employment fell by 19,000.
Retailers also trimmed 26,000 jobs from their payrolls in the report, with the greatest weakness in general merchandise retailers, the segment that includes discount and department stores.
"The headline gain of 88,000 is not so bad in macro terms but the ongoing weakness in construction and continuing paring of manufacturing jobs are a burden," said economist Robert Brusca of FAO Economics.
Meanwhile the report showed the unemployment rate edging up to 4.5 percent from the 4.4 percent reading in March, as there was a 77,000 increase in the number of people listed as unemployed.
Hourly wages crept up 4 cents, or 0.2 percent, to $17.25, which was less than the 0.3 percent gain forecast by economists. There was a 0.3 percent gain in the March reading.
A drop in the average number of hours worked meant that the typical weekly paycheck fell 0.1 percent from March. And hourly wages are now up 3.7 percent compared to April 2006, the lowest 12-month percentage increase seen since May 2006.
The generally weak report helped lift bond prices due to reduced inflation concerns, taking the yield on the 10-year note to 4.65 percent from 4.67 percent before the report.
Stocks were higher in mid-morning trading following both the jobs reading and numerous reports about media mergers. The modest job and wage growth seemed to raise hopes that the Federal Reserve might consider an interest rate cut at some future meeting.
But the Fed policymakers are widely expected to leave rates on hold when the meet on Wednesday, and some economists said they think there would have to be significantly more job weakness before the Fed would look at a rate cut.
"I think we would need to see less than 50,000-job growth for several months before the Fed focuses on payrolls rather than the other economic data that is showing strength," said John Norris, chief economist and senior fund manager at Morgan Asset Management.