Layoffs slow to 539,000 in April; jobless rate rises

5/8/2009

WASHINGTON The pace of layoffs slowed in April when employers cut 539,000 jobs, the fewest in six months. But the unemployment rate climbed to 8.9 percent, the highest since late 1983, as many businesses remain wary of hiring given all the economic uncertainties.

The Labor Department tally released Friday wasn t nearly as deep as the 620,000 job cuts that economists were expecting, and was helped by a burst of government hiring. The rise in the unemployment rate from 8.5 percent in March matched economists forecasts.

The new report underscored the toll the longest recession since World War II has taken on America s workers and companies. However, the slowdown in layoffs may bolster hopes that the worst of the downturn s hefty job losses are past.

Still, companies will remain cautious in hiring, making it harder for laid-off workers to find new jobs.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 15.8 percent in April, the highest on records dating back to 1994.

Companies also keep a tight rein on workers hours. The average work week in April stayed at 33.2 hours, matching the record low set in March.

Since the recession began in December 2007, the economy has lost a net total of 5.7 million jobs.

As the recession eats into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive the storm. Those including holding down workers hours, and freezing or cutting pay.

Job losses in February and March turned out to be deeper, according to revised figures. Employers cut 681,000 positions in February, 30,000 more than previously reported. They cut 699,000 jobs in March, more than the 663,000 first reported.

The deepest job cuts of the recession 741,000 came in January. That was the most since the fall of 1949.

Employers last month cut the fewest jobs since 380,000 in October. Nonetheless, the April job losses were widespread.

Construction companies axed 110,000 jobs, down from 135,000 in March. Factories got rid of 149,000 jobs, down form 167,000 the month before. Retailers cut payrolls by nearly 47,000, less than the nearly 64,000 cut in March. And job losses in financial activities dropped by 40,000, down from 43,000 in the previous month.

The slower pace of job losses along with an increase in government jobs of 72,000 helped to temper the overall payroll reductions in April.