(Bloomberg News) American employers added fewer workers than forecast in April and the jobless rate unexpectedly fell as people left the labor force, adding to concern the economic expansion is cooling.
Payrolls climbed 115,000, the smallest gain in six months, after a revised 154,000 gain in March that was larger than initially estimated, Labor Department figures showed today in Washington. The median estimate of 85 economists surveyed by Bloomberg News called for a 160,000 advance. The jobless rate fell to a three-year low of 8.1 percent, and earnings stagnated.
Stocks and bond yields fell on concern a slowdown in hiring may restrain the wage growth needed to fuel consumer spending, which accounts for about 70 percent of the economy. The data support the views of Federal Reserve policy makers led by Chairman Ben S. Bernanke, who say low interest rates are needed at least through late 2014 to boost the labor market.
"We're still very much on the recovery path, but we've got a huge amount of ground to make up in the labor market," said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who accurately forecast the unemployment rate. Today's report "is not really enough to push the Fed one way or the other."
The Standard & Poor's 500 Index declined 0.7 percent to 1,382.07 at 9:38 a.m. in New York. The yield on the 10-year Treasury note fell to 1.90 percent from 1.93 percent late yesterday.
Construction Cuts
Transportation and warehousing, government agencies and construction all cut jobs in April. Bloomberg survey estimates ranged from increases of 89,000 to 210,000 after a previously reported 120,000 rise in March. Revisions added a total of 53,000 jobs to payrolls in February and March.
The jobs data come six months before Americans head to the polls to either re-elect President Barack Obama or choose Republican Mitt Romney, who has said White House policies have done little to help U.S. workers.
The unemployment rate was forecast to hold at 8.2 percent, according to the survey median. Estimates in the Bloomberg survey ranged from 8.1 percent to 8.3 percent. Unemployment has exceeded 8 percent since February 2009, the longest such stretch since monthly records began in 1948.
The participation rate, which indicates the share of working-age people in the labor force, fell to 63.6 percent, the lowest since December 1981, from 63.8 percent.
Private Payrolls