U.S. companies shed more than 100,000 jobs last month, reducing payrolls to their lowest level since the recession began in early 2001, while the unemployment rate remained at 6 percent, its eight-year high, the Labor Department reported Friday.
When productivity -- the amount of goods and services produced for each hour worked -- is rising strongly, as it has been, companies can boost production significantly without having to add workers. The result is a recovery similar to the one that followed the 1990-91 recession. As many jobs have been lost as created, despite economic growth last year of about 3 percent, including growth last quarter at about a 1 percent annual rate.
"Thus far, at least, this really has been a jobless recovery -- but that is only bad news for unemployed people," said Ian C. Shepherdson, chief U.S. economist for High Frequency Economics Ltd. in Valhalla, N.Y. "For companies, and people with jobs -- 94 percent of the labor force at the moment -- a surge in productivity growth is good news. It means faster profits growth and increased real wages."
Last month the number of private-payroll jobs fell to 109.3 million, down more than 2.3 million since the recession began in March 2001. Since late 2000, the unemployment rate has risen a little more than 2 percentage points from its 40-year low of 3.9 percent. The rate first reached 6 percent last April before falling to 5.6 percent in September and then rising again to 6 percent in November.
Most of the private-sector jobs lost over the past two years have been in manufacturing, which shed 65,000 more jobs last month. But the length of the average workweek rose by 18 minutes, to 40.9 hours, and the amount of overtime rose by 12 minutes, to 4.2 hours.