Jobs decline, but less than expected

Twenty thousand Americans lost their jobs in April, marking the fourth consecutive month of a shrinking job market and providing yet another indication of an economy in distress. But the losses were far smaller than many economists had predicted, and analysts said the figures suggest that the economic downturn may not be as severe as many fear. “We’re in a recession,” said former Federal Reserve Chairman Alan Greenspan. “But this is an awfully pale recession at the moment.” The Commerce Department also reported that the nation’s gross domestic product rose 0.6 percent last quarter, an anemic pace, but better than the negative growth many had expected. In response to the combined news, stocks rose to their highest levels this year.

In a sign that the Fed remains concerned about the economy, the central bank last week cut interest rates for the seventh time in seven months. “Economic activity remains weak,” the Fed said in a statement. President Bush said tax rebates, which the government began mailing out last week, would help spur growth. “We are a resilient economy,” he said.

So much for all the doomsayers, said the Chicago Tribune in an editorial. While politicians have been wringing their hands and stirring up fear, the economy has been busy righting itself all along. The government has already taken reasonable, measured steps, such as cutting interest rates and issuing the tax rebates. Now, while those policies take effect, “our leaders should do what they find hardest during hours of panic—namely, watch and wait.”

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“Celebration may be premature,” said Greg Ip in The Wall Street Journal. The recent stock market gains don’t mean the pain is behind us. Historically, markets predict economic gains or losses yet to come, rather than reflect current reality. “It’s common in a crisis for markets to hit bottom long before the economy does.” And our current crisis, which began in the housing market but now infects the entire financial system, may be harder to dig our way out of than most.

“Are we going to be wearing barrels for clothes and burning Ikea furniture to heat our homes?” asked James Ledbetter in Slate.com. The answer, thankfully, is no. Another Great Depression is extremely unlikely. The 1930s saw four straight years of economic decline, along with 25 percent unemployment. Today, unemployment stands at 5 percent, and few experts predict more than a 16-month recession. “Not a reason to cheer—but also not a reason to panic.”