Saturday, May 06, 2006

US job growth less than expected

US job growth less than expected
The US economy created 138,000 jobs in April, fewer than expected, as the unemployment rate stayed steady at 4.7%, the Labor Department has said.

The gain was the smallest since last October, when job growth was dented by 2005's devastating hurricane season.

The financial sector, health care and manufacturing industries made most gains, but these were offset by a fall of 36,000 jobs in retailing.

The total number of jobless people was largely unchanged at 7.1 million.

Analysts had expected 200,000 jobs would be created in April.

The department also reduced the number of jobs that had been created in February and March to around 200,000 each month, from its initial estimates of 225,000 and 211,000 respectively.

The Labor Department added that the average US hourly wage had climbed by 3.8% over the past year - this was the fastest rate since August 2001.

Mixed picture

US Treasury Secretary John Snow gave an upbeat interpretation of the news.

"This month's report, showing more jobs, more hours worked and higher wages tells a positive story," he said.

But many analysts warned that the figures were below the rate of job growth need to keep up with population.

Economist Ethan Harris of Lehman Brothers said that the figures were in line with "trend-like job growth instead of booming job growth."

Earlier in the week, US economic growth was reported to be 4.8% in the first quaater of the year, higher than expected.

The most recent figures paint a confusing picture for the Federal Reserve, the US central bank which is set to decide interest rates next week.

The Fed has raised rates 15 times to 4.75%, and is widely expected to raise them again to 5.0%.

But Bernard Bernanke, the Fed boss, has suggested that a pause in rate rises might then be in order.

Story from BBC NEWS: