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Unemployment hits highest mark in 8 years
WASHINGTON -- The nation's unemployment rate jumped to 6 percent in April -- the highest in nearly eight years -- as job seekers streamed back into the market faster than companies added new positions.
The Labor Department's latest snapshot on employment, released Friday, was a fresh sign the economic recovery that started out at a sprinter's pace appears to be slowing to a jog, economists said.
They predict job hunters will continue to face tough times in the coming months even as the economy makes a comeback.
"The economy has turned a corner, but the recovery is a painful process," said Mark Zandi, chief economist with Economy.com. "The economy doesn't move in a straight line. It has fits and starts. Ebbs and flows. We're in the middle of an ebb."
Companies -- whose revenues and profits took a hit during the slump -- are worried about the recovery's staying power and are reluctant to quickly hire back workers, crank up spending and make other big commitments until they are convinced the turnaround is for real, economists said.
The big spike in the unemployment rate jolted investors on Wall Street, giving them another reason to worry about the recovery's strength. The Dow Jones industrial average fell 85.24 points to close at 10,006.63, trimming part of the 272 points gained during the previous three-day rally.
President Bush said the unemployment numbers reaffirmed his belief that while some indicators suggest the economy is recovering, he will not be satisfied until more Americans are employed.
"So long as anybody is looking for work, we've got problems," Bush said. "I've been saying all along that the growth number of the first quarter of this year was very positive, but I said 'Look, I'm not confident. We've got more work to do."'
Payrolls grew by a modest 43,000 in April, the first time U.S. companies added jobs in nine months. But job growth wasn't strong enough 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.
"People were hearing about economic growth and jobs and they came out of the woodwork to look for them,' said Sung Won Sohn, Wells Fargo's chief economist.
Companies actually cut 21,000 jobs in March, a big revision from the 58,000 job gain the government previously reported.
William Cheney, chief economist for John Hancock Financial Services, said he believed the job creation in the early part of the current recovery will match the lackluster job growth immediately following the 1990-91 recession.