Unemployment unchanged as hiring slows

U.S. employment growth slowed in April as the economy added 160,000 jobs, the smallest increase since September.
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U.S. employment growth slowed in April as the economy added 160,000 jobs, the smallest increase since September.

The jobless rate held steady at 5 percent, but the government said the labor force participation rate decreased and the employment-population ratio edged down.

The Washington Post said a thinning of the labor force is a bad sign for the economy because it means competition for jobs is diminishing and there is less pressure on employers to raise wages.

The Department of Labor revised downward the job gains of the previous two months by a combined 19,000. The government said employment gains occurred in professional and business services, health care and financial activities.

Forbes said economists anticipated 205,000 new jobs in April and a 4.9 percent unemployment rate, and the Post said the slowdown was a potential sign that broader economic sluggishness — the result of thinned corporate profits and cautious business and consumer spending — could be spilling into the labor market.

"For those who had thought a June rate hike was in play, this was a nail in the coffin. This raises questions about a September rate hike. I would like to think the economy is in a better place at the end of the year," Phil Orlando, chief equity market strategist at Federated Investors in New York, told Reuters.

The government said the number of long-term unemployed (those jobless for 27 weeks or more) declined by 150,000, to 2.1 million, in April. They accounted for 25.7 percent of the unemployed.

The number of people employed part time for economic reasons (also referred to as involuntary part-time workers) was about unchanged in April, at 6 million, and has shown little movement since November. Those people, who would have preferred full-time employment, were working part time because their hours had been cut or they were unable to find a full-time job.

In April 1.7 million people were marginally attached to the labor force, down by 400,000 from a year earlier. (The data are not seasonally adjusted.) Those people were not in the labor force, wanted and were available for work and had looked for a job sometime during the prior 12 months.

They were not counted as unemployed because they had not searched for work during the four weeks that preceded the survey.

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