Job losses shrink in April, but jobless rate goes to 8.9%
— -- Employers shed 539,000 jobs in April, pushing the nation's unemployment rate to 8.9%, but the pace of job losses slowed, leading some analysts to predict the recession will end in a few months.
A record 13.7 million Americans were out of work last month and 5.7 million jobs have been lost since the downturn began in December 2007, the Labor Department said.
The jobless rate was up from 8.5% in March and the highest since fall 1983. A year ago, unemployment was 5%.
Still, the smallest number of jobs losses in six months provided the latest and perhaps most emphatic in a series of signs that the recession's ferocity is easing.
"It's a step in the right direction, but we still have a long way to go," says Maury Harris, chief U.S. economist for UBS.
In a research note, Nigel Gault, chief U.S. economist of IHS Global Insight, was a bit more upbeat, saying, "There is light at the end of the tunnel, and it is getting brighter."
The news helped lift stocks, with the Dow Jones industrial average gaining more than 100 points in midday trading.
Recent reports have shown manufacturing and services industries shrinking more slowly. Also, consumer spending and confidence have ticked up and the housing market has shown signs of bottoming.
Analyst Richard Yamarone of Argus Research expects the recession to end by late summer but, like many economists, predicts unemployment will remain high throughout 2010. Federal Reserve Chairman Ben Bernanke testified last week that he expects unemployment to peak at slightly more than 9% early next year.
Harris says enthusiasm over April's decline in job losses was restrained by the fact that it was partly due to the addition of about 60,000 government workers for the 2010 census.
"We have to appreciate that they're temporary (workers)," he says.
Still, the 539,000 job cuts was far less than March's 699,000 and January's peak of 741,000.
"The labor market is still reeling like crazy," says Joel Naroff, head of Naroff Economic Advisors. "On its own this would be considered a terrible report, but put in the context of where the numbers had been, it's not as bad."
