Unemployment is still getting worse, but at least the bad numbers aren't piling up as fast.
The jobless rate jumped to 8.9% as employers cut 539,000 jobs in April, the Labor department said yesterday. But that payroll drop was smaller than March's 699,000 or February's 681,000, leading some forecasters to say the painful job cutting that began in late 2007 could finally be winding down.
Still, the 5.7 million jobs that have vanished in the last 18 months have left the unemployment rate at its highest since September 1983. And if laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 15.8% in April, the highest on records dating back to 1994. Economists expect monthly job losses to continue, possibly for the rest of the year.
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However, they are hoping the reductions won't be as deep. Fallout from housing, credit and financial crises -- the worst since the 1930s -- has hurt America's workers and companies, and the pain will continue. The jobs market traditionally doesn't rebound until well after an economic recovery starts.
Fed Chairman Ben Bernanke earlier this week gave his most optimistic prediction yet about the end of the recession, saying he expects the economy to start growing again this year, although more jobs will disappear even after a recovery takes hold. Companies will have little appetite to ramp up hiring until they feel the economy is truly out of the woods and a recovery is firmly rooted. Against that backdrop, many economists predict the unemployment rate will hit 10% by the end of this year and remain high into 2011. Economists say the job market may not get back to normal — meaning a 5% unemployment rate — until 2013.
After the numbers came out, President Obama planned to outline steps to urge states to let the unemployed keep their jobless benefits while getting education and training. Currently, people who are out of work and want to go back to school have to give up their monthly unemployment check. And if they decide to return to school, they often don't qualify for federal grants because eligibility is based upon the previous year's income.