WORLD> America
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WORLD> America
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US layoffs slow to 539K in April; jobless rate rises
(Agencies)
Updated: 2009-05-08 23:32 Fallout from housing, credit and financial crises - the worst since the 1930s - has hurt America's workers and companies, and the pain will continue. The jobs market traditionally doesn't rebound until well after an economic recovery starts. Federal Reserve Chairman Ben Bernanke earlier this week gave his most optimistic prediction yet about the end of the recession, saying he expects the economy to start growing again this year - although the comeback could be weak and more jobs will disappear even after a recovery takes hold.
Against that backdrop, many economists predict the unemployment rate will hit 10 percent by the end of this year. Bernanke stopped short of that figure, saying it will be somewhere in the 9 percent range. Regardless, both private economists and Bernanke agree the unemployment rate will keep climbing into next year. The Fed says unemployment will remain elevated into 2011. Economists say the job market may not get back to normal - meaning a 5 percent unemployment rate - until 2013. And the job cuts have continued this week. Steelmaker Severstal International said it's idling plants in Wheeling, W.Va., and Warren, Ohio, resulting in 3,100 layoffs due to the continuing deterioration of the steel industry. Microsoft Corp. said it was starting thousands of the 5,000 job cuts it announced in earlier this year and left the door open to even more layoffs. The Commerce Department on Friday said wholesale inventories dropped 1.6 percent in March, much larger than the 1 percent fall that analysts had expected. That followed a 1.7 percent drop in February, the largest monthly decline on records that go back 17 years. It was the seventh straight month that wholesale inventories fell as businesses struggled to get stockpiles in line with plunging sales. Wholesalers saw sales drop 2.4 percent in March, the fifth decline in six months. Still, glimmers of hope have emerged that the recession may be losing its grip on the country. The Labor Department on Thursday said the number of newly laid-off workers filing applications for jobless benefits plunged to the lowest level in 14 weeks, a possible sign that the wave of layoffs has peaked. Still, the number of unemployed workers drawing benefits climbed to a new record - 6.35 million. Other reports showed sales at many retailers fared better in April, with Wal-Mart Stores Inc. leading the way. However, Friday's employment report showed that workers' wages barely budged in April, meaning consumers will probably stay somewhat cautious in the months ahead. Average hourly earnings nudged up to $18.51 in April, a 0.1 percent rise from the previous month. In the US, the economy shrank at faster than a 6 percent annual rate late last year and early this year, the worst six-month performance since the late 1950s. Analysts think it is still shrinking now - but probably at about half that pace. Many predict the economy could start growing in the third or fourth quarter as tax cuts and government spending on big public works projects included in President Barack Obama's $787 billion stimulus package take hold.
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