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Breaking News

Unemployment Rate Rises to 4.5 Percent

Aired May 04, 2001 - 08:32   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL LIN, CNN ANCHOR: That very important number, just released by the Labor Department, the unemployment rate, rised as expected, by 0.1 percentage. Unemployment stands now, nationwide, for the month of April, at 4.5 percent.

Let's go to Peter Viles; he's got more on what this all means for the market and where this economy is going -- Peter.

PETER VILES, CNN CORRESPONDENT: This is a surprisingly negative report. Economists did expect unemployment to tick up to 4.4 percent, but as you said, it's gone up to 4.5 percent. Remember, it was just 3.9 percent last October.

But the headline in this report is in jobs: 223,000 jobs were lost in April. That's about 8,000 jobs a day. The last time the economy was losing jobs that rapidly was 1991, during the last recession.

The bond market in Chicago is already rallying on this news. Traders and investors are likely to see this news as putting pressure on the Federal Reserve to cut interest rates again, in May, when they meet -- on May 15, here in Washington.

But again, this is a much weaker report than economists had been expecting. Economists thought the economy might hold its own and maybe create a few thousand jobs in April. Instead, 223,000 jobs disappeared, almost half of them in manufacturing: 104,000 factory jobs disappeared in April. Since last June, factory jobs have declined by more than half a million.

So there is a serious recession going on in the nation's factories, if not the nation's economy.

We should remind you that the economy did grow at a 2 percent annual rate in the first quarter, so there's no indication the economy's in recession. But this is a surprisingly weak report on the health of the nation's job market.

LIN: Thank you very much, Peter Viles, for that live report.

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