Saturday, May 04, 2002
Jobless rate hits 6 percent
The Associated Press and The Cincinnati Enquirer
WASHINGTON The nation's unemployment rate shot up to 6 percent in April the highest point in nearly eight years as the effects of last year's recession continued to batter workers.
The rise in the jobless rate occurred even though U.S. companies added jobs for the first time in nine months, the Labor Department reported Friday.
April's national jobless rate was the highest since August 1994, when unemployment also was at 6 percent.
Economists said Friday's report indicated the economic recovery is still on track, though progressing at a moderate rather than sizzling pace.
The recovery is persisting, said Ken Mayland, president of ClearView Economics in suburban Cleveland. However, companies, in general, are not going to get aggressive about rehiring until the economy puts in a track record of improved prospects.
Mr. Mayland said he wasn't worried that the economy might backslide into a downturn a double-dip recession.
The Labor Department said payrolls grew by 43,000 during April, a welcome sign after companies had slashed hundreds of thousands of positions to cope with last year's recession and the jolt of the Sept. 11 terror attacks.
Still, job growth wasn't strong enough in April to take care of the 565,000 people who entered the work force during the month. That caused the unemployment rate to rise from March's 5.7 percent rate.
Ohio's unemployment, also 5.7 percent in March (the last month for which state data are available), was on the rise from 5.4 percent in February. While Hamilton County's 4.8 percent unemployment rate in March was below statewide and national averages, it's still higher than March 2001, at 3.1 percent.
Kentucky's statewide unemployment rate was 5.6 percent, just above the year-ago rate of 5.4 percent. Northern Kentucky, comprised of eight counties, had 4.4 percent unemployment for March.
Local and statewide unemployment rates, which are not adjusted for seasonal variations as na tional rates are, will be released later this month for April.
After more than a year of sustained job cuts, temporary help firms added 66,000 positions in April, the third straight month of job gains.
Economists say that's a particularly encouraging sign for job growth in general in the months ahead. Companies often hire temporary workers before they hire new full-time workers or rehire laid-off workers, they say.
Even as the economy recovers, the unemployment rate is expected to rise in coming months.
Some economists predict the jobless rate will peak at from just over 6 percent to around 6.5 percent by June, reflecting their belief that companies will be reluctant to quickly hire back laid-off workers until profits recover and executives are convinced the recovery is here to stay.
Even so, a report Thursday indicated the pace of layoffs is easing. The number of workers filing first-time claims for unemployment benefits dropped by 10,000 last week to 418,000, lowest since March 23, the Labor Department said.
The economy sprinted out of recession with a 5.8 percent growth rate in the first quarter of this year. But analysts estimate the recovery has slowed in the current quarter and they project economic growth at 3 percent to 3.5 percent rate.
Given the budding recovery, many economists expect the Federal Reserve to leave short-term interest rates now at 40-year lows unchanged when it meets Tuesday. The Fed cut rates 11 times last year to rescue the economy from recession, which began in March 2001.
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