20,000 Jobs Lost in April

The U.S. economy lost 20,000 jobs, not 75,000 jobs as had been expected and the unemployment rate went down to 5%, not up, in April.

This is the 4th consecutive month of job losses, but an improvement from the 81,000 reductions in payrolls in March.

Businesses are handing out pink slips as they cope with an economy that is on the edge of a recession, or possibly in one already. A severe housing slump, harder-to-get credit, and financial turmoil have forced people and businesses to be more cautious in their spending. And that has hurt the economy.

Jobs cuts in April include:

• Construction - 61,000
• Manufacturers - 46,000
• Retailers - 27,000

Goods-producing businesses cut 110,000 jobs in April, the largest number of job reductions since January 2002, after trimming 88,000 in March.

Those losses were eclipsed by gains in:

• Health Care
• Professional and Business Services
• Government

Service industries added 90,000 jobs - the most since last December - with most of them coming in the health care and professional technical services sectors.

The weak labor market is making employers feel less generous with compensation. Average hourly earnings for jobholders rose to $17.88 in April, a tiny 0.1 percent rise from the previous month. That was less than the 0.3 percent rise economists were forecasting. Over the last 12 months, wages have grown by 3.4 percent.

Meanwhile, increasing energy and food prices are taking a bite out of paychecks. If the job market continues to falter, wage growth probably will slow, too, making people even less inclined to spend. That would spell further trouble for the economy.

Job losses for both February (76,000) and March (83,000) turned out to be greater than previously reported.

U.S. Job Losses in April Not as Deep as Feared