Heavy Job Losses in February Came in Bellwether Sectors

By Frank Ahrens
Washington Post Staff Writer
Saturday, March 8, 2008

Of the more than 100,000 jobs shed by the U.S. private sector in February, more than half came from the manufacturing sector, largely the automobile and construction industries, a result that should surprise few.

However, even more jobs were lost in the temporary services and retail sectors, which says more about the widening sluggishness of the economy, analysts say.

In February, the private sector shed 101,000 jobs, according to statistics released by the Labor Department yesterday, the biggest monthly drop since March 2003 and the second monthly loss in a row.

The government -- federal, state and local -- added 38,000 jobs in February, bringing the net loss for the economy to 63,000 jobs.

The Labor Department estimates that the U.S. economy comprises 138 million jobs. The unemployment rate was 4.8 percent, down slightly from 4.9 percent in January.

Last month, 28,000 jobs were lost in the temporary services sector -- largely office employees -- and 34,000 jobs were eliminated from the retail industry. These are key numbers, said James E. Challenger, founder of job outplacement firm Challenger, Gray & Christmas.

Retail spending accounts for two-thirds of the U.S. economy. Temporary office workers, often contract employees brought on to handle surges in business orders, are usually the first to be let go when businesses shrink. They can act as a sort of canary in the coal mine of the U.S. economy.

The losses could be a sign that recessionary effects are creeping up from blue-collar manufacturing and construction jobs and into the broader economy, Challenger said.

"Up until now," he said, "the damage has been contained to the lower deck."

The economy's centerpiece for job gains is the surging health-care industry, thanks to the aging baby boomers and a steady pipeline of new-economy jobs that feed into it, such as bioengineering, lifestyle pharmaceuticals and genetics. The health-care sector added 36,000 jobs in February.

Challenger noted that the U.S. economy as a whole is experiencing about 70,000 layoffs a month so far this year -- about half that of the most recent recession, in 2000 to 2001. Challenger said that most of his recent clients, out-of-work job-seekers, are coming from the banking and mortgage industries.

Of the jobs shed in February, 52,000 came from the manufacturing sector. Automakers and parts manufacturers accounted for 13,000 lost jobs last month as several General Motors plants shut down because of a strike at a key parts supplier. Faced with a staggering 2007 loss of $38.7 billion, GM announced last month that all 74,000 of the company's unionized workers would be eligible for a new round of buyouts.

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