The American economy lost another 539,000 jobs in April and the unemployment rate leapt to 8.9 percent, the government reported Friday, yet the deterioration was slightly milder than expected, buoying hopes that better days are approaching.
Angelica Gomez, a bookkeeper who has been out of work for five months, left, gets information from the unemployment insurance phone bank at the Employment Development Department office in Sacramento, Calif., Wednesday.
“The labor market is still very weak, but it looks like the most intense spate of weakness is probably behind us,” said Michael T. Darda, chief economist at the research and trading firm MKM Partners. “Less bad is always a prelude to good. It’s going to take some time for this economy to get back on its feet, but we might be closer to the recession ending.”
Investors on Wall Street appeared to buy into that message, sending stock prices higher on Friday.
In Washington, President Obama called the increase in unemployment a “sobering toll” of the recession and warned of more job losses ahead. He said that a recovery could take months or years, but that the moderation in the rate of declining jobs was encouraging.
“The gears of our economic engine do appear to be slowly turning once again,” Mr. Obama said. “Step by step, we’re beginning to make progress.”
Coming a day after the Treasury pronounced American banks healthier than many analysts had anticipated, the Labor Department’s monthly snapshot of the job market presented the clearest evidence to date that the nation’s economic free fall appears to have been arrested. The acute shock that began last fall as the investment bank Lehman Brothers collapsed, followed by several other prominent institutions, appears to be relenting. Panic is no longer the dominant motif of American commercial life.
“It’s a confirmation that we’re in the early stages of a turn,” said Ethan Harris, co-head of United States economic research at Barclays Capital. “We’re getting further and further removed form the confidence shock of last fall.”
But others emphasized that the easing of dire worry, while unambiguously positive, does not mean the economy is close to regaining vigor. The economic crisis may have merely given way to something more familiar and milder, yet still miserable for tens of millions of people: a continued slog through the longest, deepest recession since the Great Depression, with demand for goods and services weak and jobs exceedingly hard to find.
“This is really horrible in any normal context,” said Dean Baker, co-director of the Center for Economic and Policy Research in Washington. “This isn’t recovery. It’s a slowing recession. In any other time other than the recession we’re in, we’d be appalled by these numbers.”
The numbers for April looked good only in comparison with recent months, with February’s data revised to show a net reduction in jobs of 681,000 — down from an initial drop of 651,000 — and March revised from an initial loss of 663,000 to 699,000.
The slightly less awful jobs report for April appeared to reflect a moderate slowdown in the pace of layoffs, but not a sudden predilection among businesses to hire. The April data was bolstered by a surge of government hiring in preparation for the 2010 Census, while private payrolls actually dipped by 611,000.
Most experts contend that significant hiring will proably take many more months if not years to emerge. Businesses are expected to cut an additional two million jobs before the economy begins growing again and the unemployment rate begins to ebb, probably sometime in 2010. Any recovery that takes hold is expected to be long and faltering, though economists expressed hope that the worst losses were ending.
It is often said that the labor market is a lagging indicator, meaning it tends to improve long after other aspects of the economy trend up. But the job market also happens to be the piece of the economy that is most important to ordinary people, and now particularly so, making such pronouncements cold comfort in many households.
After years of borrowing against soaring home prices and tapping cheap credit cards to spend in excess of incomes, millions of Americans have been forced to live within the confines of what they bring home from work. Since the recession began in December 2007, 5.7 million jobs have disappeared from the economy. In recent months, wages have stopped growing. This retrenchment chokes off the spending power needed to generate demand for more employees at factories, shopping malls and offices.
“We’re seeing fewer people employed, and those who are employed aren’t seeing their earnings power increase,” Mr. Baker said. “It’s tough to see where a recovery can come from.”
But those with more optimistic outlooks put the emphasis on the massive, government-led initiatives under way aimed at bolstering demand for goods and services, and thus increasing the need for workers.nytimes.com
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