Payrolls Fell The Most In 5 Years Last Month
Saturday, April 5, 2008
Joblessness soared and employers cut back in March, the deepest job losses in five years and strong evidence that the housing and financial market distress has spooked employers.
The Labor Department numbers released yesterday were far worse than economists had forecast. The unemployment rate rose to 5.1 percent from 4.8 percent in February and 4.4 percent in March 2007. Employers reduced their payrolls by 80,000 jobs in March, the third straight month of decline. And the department revised the previous two months' employment levels down by 67,000 positions.
"We're in recession," said David Wyss, chief economist of Standard & Poor's. "It's hard to conclude anything else."
While unemployment remains low by historical standards, job-seekers and firms that help place workers said employers are far more reluctant to hire as they have become wary of what the soft economy will mean for their businesses.
"If you're working, you might not think there is a recession," said Ruby Gilmore, an Alexandria resident who was laid off from her job in human resources in January and is still looking for work. "But looking for a job, things are very competitive. . . . It is like they are looking for a reason not to hire you."
Unemployment is worst among people with little education. The seasonally adjusted rate for people with less than a high school diploma rose to 8.2 percent in March from 7.3 percent the month before. Unemployment was unchanged, at 2.1 percent, for those with a bachelor's degree or higher.
The report shows how the problems in the housing and financial markets are rippling through other sectors, reflecting the deep connections between seemingly separate parts of the economy.
The number of construction jobs, which has declined steadily for 18 months, continued to fall. That sector shed 51,000 positions, as fewer homes are being built.
Fewer houses mean less construction and building materials; the number of manufacturing jobs fell 48,000, with some of the steepest losses among makers of lumber, drywall, and other materials. Automakers also cut jobs.
With their homes less valuable, U.S. consumers seem to be spending less, which means stores need fewer workers. The number of retail jobs fell 12,400, with the steepest losses in sellers of building materials and appliances, which are strongly tied to the housing business.
Financial firms cut 5,000 jobs, with the biggest losses in "credit intermediation" companies, which includes banks and mortgage brokers.
This has caused businesses that have little to do with housing to become less confident about the future. Professional and business services, a sector that had been keeping the economy afloat, trimmed 35,000 jobs.