Payroll growth eases, raising slowdown fears

May 5, 2012 at 12:00a.m.

McClatchy Newspapers

WASHINGTON

Concerns that the U.S. economy’s recovery is stumbling intensified Friday with the government’s second-consecutive subpar monthly jobs report.

Employers added an anemic 115,000 jobs in April, as a shrinking work force shaved the unemployment rate to 8.1 percent, down slightly from 8.2 percent in March, the Labor Department said. Friday’s numbers were well below the 170,000 new jobs that mainstream economic forecasters had expected.

The disappointing jobs report helped drive stock prices down. The Dow Jones industrial average fell 168 points to close at 13,038. The Standard & Poor’s 500 dropped 22 points to 1,369. The tech-heavy Nasdaq average suffered its worst day of the year, sinking 68 points to 2,956.

Economists think that companies’ hiring early amid an unusually mild winter explains some of the bouncy numbers.

“The job market was soft in April, given the tepid payroll-job gain and the decline in labor-force participation. But it isn’t as soft as the data suggest, as it reflects payback from the very warm winter, which juiced up job gains earlier in the year,” said Mark Zandi, the chief economist for forecaster Moody’s Analytics.

Zandi thinks unemployment will be under 8 percent by Election Day, Nov. 6, and that hiring will perk up again later in the year.

Part of his optimism came from revisions Friday that showed that hiring in March was 154,000, not 120,000, and that February’s sizzling initial report of 240,000 jobs was actually 259,000. Viewed over a longer stretch, the hiring picture looks stronger than the single month of April.

The jobless rate, which fell by a tenth of a percentage point, is declining in part because of workers exiting the labor market.

“The decline in unemployment also reflects the expiration of the emergency unemployment- insurance program in an increasing number of states. Older workers losing unemployment insurance are leaving the work force, contributing to the decline in labor-force participation, and younger workers that were slow to take a job now have no choice,” Zandi said. “I expect the job market to re-accelerate later this summer and fall.”