US employers cut jobs for the fourth consecutive month in April, but the pace of the losses slowed sharply, providing at least some hope that the nation can avoid a deep economic downturn.
Employers shed 20,000 jobs last month, after eliminating more than 80,000 in March, the Labor Department reported yesterday. The unemployment rate, meanwhile, slipped to 5 percent, from 5.1 percent in March.
The employment report, while undoubtedly weak, added to hopes that the economy is beginning to stabilize after several months of economic and financial turmoil. Many economists still believe the country has slid into recession, but the labor market's better-than-expected performance last month suggests the downturn may end up short and mild.
This week, the Commerce Department reported the economy continued to grow in the first three months of the year, albeit barely, while the Federal Reserve signaled that the situation has stabilized enough that it may pause its aggressive interest rate cuts. Investors, too, took some heart in this week's economic news. The Dow Jones industrial average gained 48.20, building on Thursday's triple-digit rally, to close at 13,058.20. The broader Standard & Poor's 500 index rose 4.56 to close yesterday at 1,413.90, while the technology heavy Nasdaq Composite index slipped 3.72 to 2,476.99.
Recent economic data "are clear signals that the US economy is not collapsing," said Wells Fargo amp; Co. senior economist Eugenio J. Aleman in a note to clients. "Under this environment, it seems that this is very good, or at least not as bad as markets were expecting." The somewhat upbeat employment report was led by gains in two sectors particularly important to Massachusetts. Education and health services, which includes universities and hospitals, led all sectors in April, adding more than 50,000 jobs. Professional and business services, which includes technology, scientific, and consulting firms, were not far behind, gaining nearly 40,000. The strength of those sectors helps explain why Massachusetts' economy has performed better than the United States as a whole in recent months. Combined, they account for 34 percent of the state's payroll jobs, compared with 27 percent nationally, and the sectors expanded solidly over the past year. The University of Massachusetts this week reported that the state economy grew five times faster then the nation in the first three months of year. During that period, the state added 4,600 jobs, even as the nation shed more than 200,000, and the state unemployment rate slipped to 4.4 percent, compared with about 5 percent nationally. The state will report April employment and unemployment figures in about two weeks. "The sectors that are our strongest are holding up well," said John Bitner, chief economist at Eastern Investment Advisors, a unit of Eastern Bank of Boston. "We're doing better than the average state economy - for a change." Still, for some industries the situation remains grim. Construction, reeling from the housing slump, lost more than 60,000 jobs nationwide in April, and manufacturers cut 46,000 jobs. Retailers, hurt by a pullback in spending as consumers struggle with falling home values and rising food and energy prices, cut 27,000 jobs.
Robert Gavin can be reached at rgavin@globe.com.
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