The US unemployment rate returned to an eight-year high in April but the rate of job losses has started to slow, US government data revealed yesterday.
While the new figures suggested the US economy continued to show little or no growth last month, they also provided preliminary signs of a possible rebound following the Iraq war. The jobless rate rose to 6 per cent last month, from 5.8 per cent in March, returning to December's eight-year high, the Labour Department said.
On Wall Street, stock prices rose in early trading, partly on relief the unemployment figures had not been worse. Payrolls shrank by 48,000 in April after a loss of 124,000 in March.
But the rate of job loss was the smallest this year, and much of the unemployment rate increase reflected a sharp rise in the number of job-seekers drawn back into the labour market. Factory payrolls were down by 95,000 in April.
"New business investment may not recover nearly as quickly or as much as is anticipated," said Mr Charles McMillion, an analyst for MBG Information Services, a Washington, DC consultancy.
On a worrisome note, though, weekly hours worked were cut back sharply to 34 hours in April from 34.3 in March.
Payrolls in March slumped by 124. The data highlight the challenges facing President Bush, who declared victory in the Iraq war on Thursday from the deck of a US aircraft carrier but will now have to turn his attention to domestic issues - chiefly the economy.
The president, heading into the 2004 election campaign, has been pushing Congress to pass at least $550 billion (€490 billion) in tax cuts but has been unable to win support from Senate moderates, including some members of his own party.
Reacting to the jobs numbers, White House spokesman Ari Fleischer said they were a "source of concern" and cited them as a reason Congress should pass the tax cuts.
Meanwhile, Democrats charged that the data were evidence of the "failed economic policies" of the Bush administration.
There was some encouraging news yesterday from the US commerce department, which reported the biggest increase in orders to US factories since July.
However, Mr Norbert Ore, who oversees the ISM manufacturing survey, warned that "consumer confidence has come back, but it's going to take business confidence a good deal longer".
