More US workers lost their jobs in April than in any single month for the past 10 years, underlining the depth of the economic slowdown in America and raising fresh fears that despite recent signs of recovery the economy could still slip into a recession.
The US labour department said 223,000 were laid off in the past month, compared to 53,000 in March. The shock rise pushed up the annual unemployment rate from 4.3 per cent to 4.5 per cent, the highest since October 1998. April was an unprecedented fifth consecutive month in which more than 100,000 job cuts were reported, with the hardest hit being telecommunications, computer and electronics, the automobile sector and retailers. Markets initially fell on the gloomy news, but recovered as investors anticipated a further interest rate cut this month to boost the economy. The Federal Reserve has already cut rates four times since January 1st and economists predicted that the Fed could cut rates by another 50 basis points in June.
Job losses can result in a serious drop in consumer confidence. "These layoffs put us back in the tank again for consumer spending," said Chuck Hill, research director at FirstCall/Thomson Financial in Boston.
The last biggest April payroll cuts occurred in February 1991 when 259,000 lost their jobs as the recession was ending.
