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Archive for Saturday, April 2, 2005

Unemployment rate falls despite limited hiring

April 2, 2005

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— America's employers, hit by high energy bills, turned more cautious in March and boosted hiring by just 110,000 jobs, the fewest in eight months. Still, that was enough to push the unemployment rate down.

The newest jobs report, released Friday by the Labor Department, offered another mixed picture of the country's hiring climate. The labor market has been one piece of the economy that has struggled the most to get back to full throttle after the 2001 recession.

"America is not flicking on the hiring switch," said Richard Yamarone, economist at Argus Research Corp. "Right now businesses have to contend with skyrocketing energy and commodity costs, but there is little they can do about that. The one big cost that they can control is labor. That is being done by tightening the hiring reins."

Nevertheless, the labor market was able to accommodate enough people to drop the unemployment rate from 5.4 percent to 5.2 percent, matching January's figure.

On Wall Street, stocks fell, partly reflecting investor jitters over oil prices, which surged to a record high Friday. The Dow Jones industrials lost 99.46 points to close at 10,404.30.

Payroll growth, as measured by a survey of businesses, slowed in March. Job losses at factories and in the retail sector tempered gains in professional and business services, construction, education and health services and in other industries.

All told, March's payroll gain of 110,000 was roughly half the number economists expected. That was down from February's 243,000 new jobs.

The seasonally adjusted overall civilian unemployment rate, which dropped to 5.2 percent in March, is based on a survey of 60,000 households. It showed that 357,000 people said they found employment last month, outpacing the number of people who couldn't find work.

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