Tags: Jobless | Rate | Rises | but | Recovery | Sight

Jobless Rate Rises to 6, but Recovery in Sight

Friday, 03 May 2002 12:00 AM

The government said the unemployment rate rose to 6.0 percent from 5.7 percent in March. The rate was its highest level since August 1994 when the rate was also 6 percent.

The Labor Department said the economy created 43,000 non-farm jobs during the month after losing a revised 21,000 during March, which the government originally reported as rising by 58,000.

Economists on Wall Street were expecting the overall unemployment rate to rise to 5.8 percent and non-farm payrolls to grow by 58,000 during the month.

The economy lost 2,000 in February, 126,000 jobs in January and 106,000 jobs in December.

Analysts said the report suggested the economy was recovering from its first recession in a decade.

They also noted that the recession, which began last March, might have run its course and that the unemployment rate showed that the economy is beginning to generate enough jobs for all the new workers joining the labor force. Experts said the report suggested the U.S. economic recovery is not strong enough to prompt the Federal Reserve to raise interest rates before summer.

U.S. economic data released April 26 have convinced most experts that the country's first recession in a decade is over.

The Commerce Department reported that the U.S. economy during the first quarter posted its best performance in more than two years as government spending on national defense rose at its fastest clip since 1967.

The government agency said the economy, as measured by the gross domestic product, expanded at a 5.8 percent annual rate during the first quarter, its strongest performance since the fourth quarter of 1999.

Federal Reserve Chairman Alan Greenspan said last month that an economic expansion is "already well under way."

The Fed is predicting the U.S. economy will grow between 2.5 percent and 3 percent this year.

Investors, as a result, have expected the Fed to raise interest rates rapidly, beginning no later than June.

Some economists think the Fed may adopt a preference for higher interest rates as early as May 7, when its top policymakers next meet.

Economists noted the Fed never raises interest rates until after the unemployment rate has stabilized in the wake of a recession.

The latest report from the Labor Department showed average weekly earnings fell 0.2 percent to $500.93, the average workweek fell 0.1 percent to 34.1 hours, and hourly earnings rose 0.1 percent.

The average factory workweek was unchanged at 41.0 hours. Overtime in the manufacturing sector rose by 6 minutes to 4.3 hours.

The Labor Department said the services sector added 87,000 jobs in April after adding 72,000 in March.

"This marks the first time the industry has had substantial consecutive monthly increases in over a year," said Lois Orr, acting commissioner of the bureau.

But, offsetting those gains were construction, which lost 79,000 jobs, and manufacturing, which fell by 19,000.

The report also showed retail jobs rose by 23,000 during the month.

Copyright 2002 by United Press International.

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The government said the unemployment rate rose to 6.0 percent from 5.7 percent in March. The rate was its highest level since August 1994 when the rate was also 6 percent. The Labor Department said the economy created 43,000 non-farm jobs during the month after losing a...
Jobless,Rate,Rises,but,Recovery,Sight
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2002-00-03
Friday, 03 May 2002 12:00 AM
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