WASHINGTON - a new increase in layoffs is the latest sign that higher fuel prices may be slowing the economy.
A 23% increase in applications for benefits for a month suggests that hiring may seem lower than when the Government issues April report jobs Friday.
The price of oil fell Thursday to settle below US $100 per barrel for the first time since mid-March. The decline follows a turbulent section in which oil rose 35 percent in mid-February at the end of April. Still, diving in oil may be enough alone to prevent the pump price to reach a national average of $4 per gallon
Most analysts agree that the economy has strengthened enough to continue to grow this year. But the price of gasoline increased 44 consecutive days. Consumers spend more to fill the tanks, leaving them with less money elsewhere. As a result, many companies are feeling less certain on the health of the economy and could delay hiring plans.
"We found that higher gasoline prices can lead to a slowdown in the pace of the hiring," said Daniel Silver, an economist at JPMorgan Chase.
Applications rose last week to a 474,000 seasonally, an eight-month high. A spokesman for the Ministry of labour, said that the spike was largely the result of unusual factors, including a large number of school systems in New York that closed during spring break.
Still, applications increased nearly 100,000 three years in February of 375 000 low - a figure that is generally consistent with the sustainable employment growth.
The third place in four weeks also contributed Thursday in a liquidation of Wall Street. The Dow Jones index fell 139 points close to residents for the day, although the decline was also influenced by the decline in oil prices.
"The trend is clearly upward, it is disconcerting," said Kurt Karl, Chief U.S. economist for the Switzerland on "when you get three or four weeks in a row of special factors, they are more so special."
Most economists are paste with their prediction for the report on the use of Friday. The consensus is the economy added 185,000 jobs in April and the unemployment rate was unchanged at 8.8%. But weak data on foot and other recent reports updates have stirred concerns that earnings could decline in the coming months.
The United States service sector, which employs 90 per cent of the workforce, increased the month last to the slowest pace since August, the report published this week by a group of trade privacy. And the National Federation of independent business said Thursday that almost twice as many companies cut workers also added jobs in April. The number of businesses to create jobs over the next three months of planning was also low.
"Apparently, clients are not showing," said Bill Dunkelberg, Chief Economist at the NFIB.
Gasoline prices are weighing on consumers. The average national is $ 3.99 per gallon Thursday, according to AAA. It is 30 cents higher than a month earlier. The sustained increase is siphoning money away other purchases.
Silver, JPMorgan analyst, said of higher gas prices are one reason it is expected that the economy added only 165 000 new jobs in April. What would be gains of 216 000 in March and 194,000 for February. Temporary closures in the automotive industry are another, said Silver.
The earthquake in the Japan has created a shortage of parts affecting automakers. Honda Motor Corp. has reduced production at 10 of its Canadian and U.S. plants. Toyota has reduced its production by two-thirds. Both have said that they are not to lay off workers.
Most analysts agree that the economy has strengthened enough these last few months to continue its growth. This year, auto sales increased at a healthy clip. And retailers said Thursday that sales soared in April, although some aimed at low-income consumers warned that their customers are faced with prices more gasoline.
The trapped more than American companies work of their staff in the first three months of the year, according to a report of separate work. But all of the productivity gain was much slower than in the previous three months.
A slowdown in the growth of productivity is bad for the economy if it persists for a long time. But it may be good in the short term when unemployment is high, as he points out that companies must hire more workers to make additional gains.
"We always believe that hiring will resume this year as companies cannot continue to the productivity cow as fast as in recent years, of milk", said Sal Guatieri, an economist at BMO Capital markets.
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