Job creation fell in April

WASHINGTON - The number of jobs created by employers nationwide fell in April and was the lowest in 21/2 years, a sign that problems in the economy may be spreading to include retailing and financial services.

The economy added just 88,000 jobs last month, and the unemployment rate rose to 4.5 percent of the labor force, the Bureau of Labor Statistics reported yesterday.

The April new-job total was less than the 100,000 economists had forecast and the 177,000 jobs added by employers in March.

The fresh employment picture showed that job losses were spreading beyond the struggling manufacturing and housing sectors. Workers' paychecks also grew more slowly.

"This isn't yet a dramatic slowing in the labor market, but the momentum is clearly down," said James O'Sullivan, senior economist at UBS Securities L.L.C. in Stamford, Conn. "With the labor market weakening, and gasoline prices up, the outlook for consumer spending the next few months is less positive than it was in the first quarter."

Given the housing slump, rising energy prices, and sluggish overall economic activity, "businesses are a bit more cautious and reluctant to hire as aggressively as they had," said Mark Zandi, chief economist at Moody's Economy.com in West Chester, Pa. "Businesses were voraciously hiring people a year ago, and now they've got a bit of indigestion."

The new count of jobs added to the economy was the lowest since 65,000 in November 2004. The rise in the unemployment rate, however, was slight compared with March's 4.4 percent rate, which had matched a five-year low.

Taken together, the figures suggest the employment situation is weakening a bit - but not collapsing - as the nation's economy makes its way through a soft patch. Economists do predict that the unemployment rate will climb in the coming months and approach 5 percent by the end of this year, still relatively low by historic standards.

Those with jobs, meanwhile, saw wage growth slow.

Average hourly earnings rose to $17.25 in April, a 3.7 percent increase over the last 12 months. That marked the slowest annual rise in a year.

Still, analysts considered the wage increase solid, and because it probably outpaced inflation, "workers are still staying ahead," said Lynn Reaser, chief economist at Bank of America's Investment Strategies Group.

Wage growth is important for workers, and it supports consumer spending, a vital ingredient to the economy's good health. The slower growth in wages should ease inflation fears.

Health care and education, leisure and hospitality, government, and various professional and business services were among the sectors adding jobs in April. Those gains, however, were tempered by job losses nationwide in construction, manufacturing, retailing and financial services.

The government accounted for 25,000 of the 88,000 jobs created in April, while the remaining 63,000 came from private companies.

The state labor market figures released yesterday are for March, one month behind the national data.

Pennsylvania

Unemployment rate: 3.8 percent, down from 4.0 percent in February.

Biggest job gains:

Trade, transportation and utilities+2,400

Construction+2,000

Education/health+1,900

New Jersey

Unemployment rate: 4.3 percent, up from 4.1 percent in February.

Biggest job gains:

Construction+1,800

Education/health+1,500

Leisure/hospitality+700

SOURCE: Bureau of Labor Statistics

EndText