April Payrolls Fall 223,000, Far Worse Than Expected

Updated from 8:38 a.m. ET

The Labor Department reported that the April jobs report showed the largest one-month decrease in payrolls since February 1991. Payrolls declined by 223,000 and the unemployment rate rose to 4.5%, the highest it's been since October 1998.

This is the second consecutive month that payrolls have declined, and with the exception of the automobile workers strike in the summer of 2000, it's the first time that has happened since early 1992. March payroll figures were revised to a loss of 53,000 from an original estimate of 86,000. Job losses were widespread, with the manufacturing sector losing 104,000 jobs and the service sector dropping 59,000 jobs. The consensus among economists was for 5,000 new nonfarm payrolls in April and for the unemployment rate to rise to 4.4%.

The labor market has been a sore thumb in the economic landscape. Consumer spending has remained relatively strong and the Fed has been lowering interest rates, so the investment community has been generally positive on the outlook for the economy looking out at the end of the year. But the trends in the labor market are currently unfavorable, and job security, for most people, remains the most important aspect of their assessment of their finances. With another month of job losses, that's sure to interrupt the market's general assumption that the economic environment was improving. ...