US unemployment climbed to 8.9 per cent in April, its highest level in a quarter of a century, as the economy shed more than half a million jobs, official figures showed yesterday.
The latest non-farm payrolls data found that 539,000 jobs were lost in April. But the decline was down from a revised 699,000 the previous month, and the smallest monthly total since October.
The picture is consistent with the idea that the pace of the economic downturn is starting to slow. However, it also confirms that the labour market remains one of the darkest corners of the US economy, and is still far from stabilising.
"Clearly the labour market is still very weak, but . . . the pace of decline is slowing. And that's all we can hope for," said Michelle Meyer, an economist at Barclays Capital.
On the plus side, the unemployment rate, which only includes jobless people who are actively looking for employment, was lifted by the rising number of people searching for work again.
On the minus side, the main reason for the slowing pace of job losses was government hiring, which was inflated by the need to recruit staff for a once-in-a-decade census.
The US private sector lost 611,000 jobs in April, down from 693,000 the previous month but still a high rate. The government is banking on stimulus spending, including help for state and local governments, to help mitigate overall job losses in the months ahead.
The private sector continues to shed a lot of jobs, with manufacturing, construction and business services (which includes temporary help workers) leading the way. Every private sector industry lost jobs last month, with the exception of healthcare, which seems recession-proof, although even in this sector net job creation is lagging behind last year's rates. - Copyright The Financial Times Limited 2009
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