* Non-farm jobs increase 115,000 in April
* Unemployment rate falls to 8.1 percent
* Private sector payrolls grow 130,000
By Jason Lange
WASHINGTON, May 4 U.S. employers cut back on
hiring in April and the jobless rate fell as people gave up the
hunt for work, a somber note on the economy that could hurt
President Barack Obama's re-election chances.
Employers added just 115,000 workers to their payrolls last
month, the Labor Department said on Friday.
It was the third straight month in which hiring slowed,
keeping fears alive that the U.S. economy is losing momentum. It
also dampens hopes that a stretch of strong winter hiring
signaled a turning point for the recovery.
"It shows sluggish growth," said John Doyle, currency
strategist at Tempus Consulting in Washington.
The unemployment rate ticked a tenth of a point lower to 8.1
percent, a three-year low, as people left the workforce. The
jobless rate is derived from a separate survey of households,
which showed a drop in the number of jobs in April.
Still, the report was not all negative. The government
revised upward its initial estimates for payroll growth in
February and March by a combined 53,000. That left the six-month
average of job growth at 197,000, nearly exactly where it would
have been had April job growth come in as expected at 170,000.
Futures for U.S. stocks were flat following the release of
the payrolls data. Yields on U.S. government bonds edged lower.
The report could rattle nerves at the White House. Weak U.S.
growth and high unemployment create a formidable headwind for
Obama, who entered office during the darkest days of the 2007-09
His Republican challenger, Mitt Romney, repeatedly has
accused Obama of doing too little to foster job growth.
The unemployment rate, which soared to as high as 10 percent
during Obama's first year in the office, held near 9 percent for
most of last year before falling sharply over the winter.
Still, it remains about 2 percentage points higher than its
average over the last 50 years, and the U.S. Federal Reserve
thinks the labor market probably will not post a full recovery
for at least another several years.
Fed Chairman Ben Bernanke said last month the central bank
is providing enough support for the economy but kept open the
possibility of easing monetary policy should the economy weaken.
"I don't think Fed policy is going to change at this point,"
said Sean Incremona, an economist at 4cast. "They obviously are
going to be on guard now that employment growth is not picking
up and is more likely to slow."
So far this year, the labor market has given mixed signals.
During the winter, fast growth in payrolls led many analysts
to think the economy was turning a corner. Then jobs growth
braked in March, fueling fears the recovery was losing momentum.
Most economists think mild weather muddied the waters,
boosting hiring in the winter but making spring look weaker
because companies had pulled hiring forward.
"It's not that there's something wrong with the economy.
Employment just got ahead of itself," said Robert Mellman, an
economist at JPMorgan in New York.
The report showed the private sector accounted for all the
job gains in April, adding 130,000 new positions. Manufacturing
registering another strong month, adding 16,000 jobs.
Wall Street analysts see economic growth holding at a
lackluster 2.2 percent annual rate in the second quarter,
matching its pace in the first three months of the year.
The length of the average work week held steady at 34.5
hours in April.