Monday, May 11, 2009

(Allegedly) Pace of US job losses is slowing

The US economy lost 539,000 jobs in April, fewer than in previous months, in a sign that the US jobs market might be beginning to improve.

April's figure was better than the 600,000 economists were expecting and below March's revised 699,000 jobs.

The Labor Department said that the unemployment rate rose to 8.9%, its highest level since 1983 and up from 8.5% in March.

Since December 2007, the US economy has lost 5.7 million jobs.

The data showed job losses across most sectors of the economy, although hiring picked up in education, health services and government.

“ It's a terrible number but an improvement relative to the very terrible numbers we had before ”
Jay Mueller, Senior portfolio manager at Wells Capital Management
Chris Rupkey, an economist at Bank of Tokyo Mitsubishi said the economy may have reached a turning point and the labour market could begin to improve.

"The economy doesn't turn on a dime but it does look as if the pace of job losses is starting to slow from the turn of the year," Mr Rupkey said.

"You can make the case that the panic layoffs that we saw at the turn of the year are starting to ease."

There have been some signs that the worst of the recession in the US may be over.

Consumer spending, which plunged in the last half of 2008, grew in the first quarter of this year and some recent data on the housing market has been more upbeat.

The head of the US central bank, Ben Bernanke, has said he expects the recession to end this year unless there is a major financial setback.

But others are less optimistic and predict that unemployment will decline further.

"It's a terrible number but an improvement relative to the very terrible numbers we had before," said Jay Mueller, senior portfolio manager at Wells Capital Management.

"The big question is, has the peak in job losses hit? I am somewhat sceptical that we have seen the absolute worst of it."

Story from BBC NEWS:

Published: 2009/05/08 13:24:45 GMT

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