The nation's employers shed 20,000 jobs in April, while wages stalled, leaving Americans struggling to keep up with rising energy and food costs, the Labor Department said Friday.
The nation's unemployment rate, based on a separate survey of households, dipped to 5% in April from 5.1% in March. The employment picture was less brutal that the 75,000 job loss economists had predicted, Still, it reflects a badly stumbling economy. The Commerce Department this week said the economy grew at a barely perceptible 0.6% annual rate in the first quarter of the year.
There are now 7.6 million Americans out of work, compared with 6.8 million a year ago. The jobless rate is highest for teenagers at 15.4%, African-Americans at 8.6% and Hispanics at 6.9%.
"The economy has clearly slipped into a mild jobs recession because the housing meltdown and credit market turmoil has spread to the broader economy," said Steven Wood of Insight Economics. "Persistent job losses will pull the overall economy into recession."
In a sign that the nation's economic woes are ongoing the Federal Reserve announced shortly before the job numbers were released that it is increasing the amounts it will loan to commercial banks and accepting wider collateral for loans to investment banks. The actions are intended to alleviate a global credit criss that has dampened economic growth.
The Labor Department said the average workweek dipped during the month, while factory overtime was down. Average hourly earnings for jobholders rose 0.1% to $17.88 in April; average weekly earnings fell 0.2% in April to $602.56.
Over the past year, average hourly earnings rose 3.4% and weekly earnings were up 3.1%. But consumer inflation has risen 4% in the past 12 months.
In other economic news, the Commerce Department reported that orders to U.S. factories rose a bigger-than-expected 1.4% in March, after two straight months of declines.
Job losses were once again concentrated in the construction, manufacturing and retail sectors, according to the report's payroll survey.
Construction employment declined 61,000, reflecting carnage in the housing sector and a slowdown in commercial and other projects. Since its peak in September 2006, the construction sector has lost 457,000 jobs.
Manufacturing fared little better in April. Factory employment was down 46,000, with large layoffs in the auto sector, at metal fabrication and furniture plants. Manufacturing has lost 326,000 jobs in the past year.
The retailing workforce shrank by 27,000.
The huge services sector had pockets of strength, including health care, computer design, technical and food services. Meanwhile, the household survey showed a large increase in the workforce during the month, which helped blunt the unemployment rate.
"The report does not prove conclusively that the U.S. economy is already in a recession, but it is certainly 'recessionary,'" said Roger Kubarych of UniCredit
The Fed on Friday increased the amount that banks can borrow under a special auction process to $75 billion from $50 billion. The central bank also expanded the types of collateral that investment banks are allowed to use in order to borrow from the Fed. The Fed offers 28-day loans to commercial banks, via a biweekly auction process. The amount of loans outstanding will rise
The central bank has made a number of moves to address a severe credit crunch. It has also cut a key short-term interest rate from 5.25% to 2% since September, in an effort to protect the overall economy. The central bank signaled Wednesday, when it announced its most recent, quarter-point rate cut, that it might be nearing the end of its steady rate-cutting campaign.
In addition to the Fed moves, the Treasury Department has started mailing out tax rebate checks, part of an economic stimulus package passed by Congress earlier this year.