2012.05.04 17:25:06 US Payrolls Rise 115,000; Jobless Rate 8.1%

WASHINGTON -- U.S. job growth slowed again in April and more Americans dropped out of the work force, a fresh sign that the economy could be settling into a sluggish spring. Nonfarm payrolls grew by 115,000 last month, the Labor Department said Friday. The unemployment rate, obtained by a separate survey of U.S. households, ticked down a tenth of percentage point to 8.1%. "The very modest 115,000 increase in US non-farm payrolls in April will raise fears that the recovery is fading fast, just like it did at this time last year," said Paul Ashworth, chief U.S. economist at Capital Economics. Economists surveyed by Dow Jones Newswires had forecast a gain of 168,000 in payrolls and for the jobless rate to remain at 8.2% in April. On a positive note, February and March payrolls were revised up by a combined 53,000. But the pace of job creation over the past two months--an average of 134,500 a month--is still well below December, January and February's 252,000. "We interpret this as consolidation, not the start of a prolonged slowdown," said Jay Feldman, economist at Credit Suisse. "Job growth ran too far too fast ahead of private sector final demand for a period of time, perhaps due to the warmest winter in a century, and is now coming back to earth." Friday's report also brought the unemployment rate to its lowest level in more than three years. The figure has fallen sharply since August, when it was 9.1%. But some of the decline has been due people dropping out of the work force. The labor force participation rate in April slipped to its lowest level in more than 30 years as the work force shrank by 342,000 from a month earlier. "Falling unemployment is a feature of a shrinking labor force participation rate, not "true" underlying improvements in job conditions," said Guy LeBas, managing director of fixed income Strategy at Janney Montgomery Scott. Federal Reserve officials have said that they expect only gradual improvement in the labor market the rest of this year. The Fed last week forecast that the unemployment rate would fall to somewhere between 7.8% and 8.0% by the end of 2012. If the labor market stalls, the Fed could reconsider measures to stimulate the economy. "If unemployment looks like it's no longer making progress, that will be an important consideration in thinking about policy options," Fed Chairman Ben Bernanke said last week. Friday's report showed that private companies again fueled the growth, adding 130,000 jobs in April. Governments, meanwhile, cut payrolls by 15,000. Job growth came from a variety of sectors. Professional and business services, which includes temporary help, engineering and software design, added 62,000 jobs. The retail sector rebounded, while health care and manufacturing continued to gain. Manufacturers added 16,000 jobs. Transportation, warehousing and construction sectors lost jobs. Wages barely inched ahead. Average hourly earnings rose by 1 cent to $23.38. Wages were up 1.8% year over year. The average workweek was unchanged at 34.5 hours. A broader measure of unemployment--which includes job seekers as well as those stuck in part-time jobs--was unchanged at 14.5%. The Labor Department's employment report can be accessed at: http://www.bls.gov/news.release/empsit.toc.htm -By Jeffrey Sparshott and Josh Mitchell; Dow Jones Newswires; 202-862-9291; jeffrey.sparshott@dowjones.com (END) Dow Jones Newswires May 04, 2012 08:55 ET (12:55 GMT)