Economy Watch: April Hiring Tepid

By Dees Stribling, Contributing Editor

Economists had thought that hiring would be a little weak in April, and they were right, since according to the Bureau of Economic Analysis on Friday, the U.S. economy created 115,000 jobs during the month, a shade less than the modest 120,000 in March. Much of the hiring was in professional and business services, retail trade and health care. The official unemployment rate (which is based on a different survey than the hiring report), ticked downward to 8.1 percent from 8.2 percent, partly because some workers quit looking for work.

On Thursday, the U.S. Department of Labor reported that for the week ending April 28, initial jobless claims dropped to 365,000, experiencing a decrease of 27,000 from the previous week’s revised figure of 392,000. It is, of course, a volatile measure, and the upward trend of previous weeks kept the four-week moving average for claims going in an upward direction to 383,500, a small increase of 750 from the previous week’s revised average of 382,750.

Challenger, Gray & Christmas said on Thursday that planned layoffs were a shade over 40,500 in April, a rise of 7.1 percent from the previous month and 11 percent up from a year ago. The company characterized it as an uptick: “We do not foresee a sudden upsurge in downsizing activity,” Challenger, Gray & Christmas CEO John A. Challenger said in a press statement. “The monthly totals remain well below levels that would signal a reversal in the recovery.”

Residential asking prices see uptick

Trulia, a San Francisco-based specialist in housing trends, released its Trulia Price Monitor and Trulia Rent Monitor on Thursday, which report early leading indicators in home prices and rents, according to the company. In the for-sale realm, the report focused on asking prices, and discovered that on average nationally they were 0.5 percent higher in April than in March. It’s a trend with some legs, apparently. Together with increases in March and February, asking prices in April rose nationally 1.9 percent quarter-over-quarter.

Trulia notes that the market with the largest year-over-year increase in asking prices was metro Miami, up 16.1 percent. Small wonder, considering the housing renaissance in that particular market, buttressed by an influx of well-heeled buyers from Latin America looking to own their own piece of North America. More surprising is the growth in asking prices in Phoenix, up 15.8 percent since last year, though that city had taken quite a sucker punch during the housing crash, and thus has a steep recovery curve.

The question about rents wasn’t whether they were up since last month or last year, since everyone knows they were, just about everywhere. Instead, the question is up how much? Trulia reports that the average annual increase nationally was 5.6 percent. The MSAs with the sharpest increases were Edison-New Brunswick, NJ (15.6 percent); San Francisco (13.2 percent); and Miami (12.3 percent).

Rate of non-manufacturing growth slows

Non-manufacturing economic activity grew in April for the 28th consecutive month, according to the purchasing and supply executives surveyed in the latest Non-Manufacturing ISM Report On Business, but the rate of grow was down. The ISM Non-Manufacturing Index declined to 53.5 percent in April, 2.5 percentage points lower than the 56 percent registered in March (over 50 is still growth).

According to the NMI, 15 out of 18 non-manufacturing industries reported growth in April, but respondents’ comments reflected concern over the slowing rate of growth. Also, they remain concerned about the cost of fuel and its impact on shipping, transportation and the price of petroleum-based product costs. The industries that reported contraction were agriculture, forestry, fishing and hunting; utilities; and mining.

Wall Street dropped in anticipation of the jobs numbers, with the Dow Jones Industrial Average down 61.98 points, or 0.47 percent. The S&P 500 lost 0.77 percent and the Nasdaq declined 1.16 percent.