U.S. Jobless Rate Rises As Economic Weakness Spreads
The news is yet another warning sign for the trucking industry, since it shows the economic weakness continued to spread last month. It raises new questions about when the economic slowdown may end.
Since employment levels drive so much economic activity, the new slide in the jobs market can further weaken consumer confidence and spending patterns. And it shows that many businesses are still retrenching, which can further cut into freight shipments.
Labor’s report showed signs that the slump that had begun with manufacturing, and which had been generally limited to that sector, may now be spreading to other parts of the economy.
However, manufacturers eliminated jobs for the ninth straight month, and employment at services businesses fell for the first time since July.
Factories lost a total of 104,000 jobs in April, the most since last August, while service employment fell 59,000 after rising 10,000 a month earlier. Only the retail and government sectors added to their payrolls.
And there already have been several companies announcing new job cuts so far in May. They include Newell Rubbermaid, which said it would eliminate 3,000 jobs over the next three years.
Bloomberg noted that the apparent broadening of the economy’s weakness implies a greater recession risk. It also helps explain why the Federal Reserve suddenly cut interest rates last month, and will likely cut for a fifth time this year when they meet on May 15.
Average hourly earnings, a key gauge of consumer buying power, rose in April by 0.4% for the second consecutive month.
