Transcripts

Unemployment Reaches a 25 Year High

SUSIE GHARIB: New painful statistics today about the job market, 12.5 million Americans are out of work and the nation's unemployment rate is now at 8.1 percent. That's the highest level in a quarter century. American businesses cut 651,000 jobs in February, the fourth straight month of massive layoffs. And as Scott Gurvey reports, don't look for the situation to get better any time soon.

SCOTT GURVEY, NIGHTLY BUSINESS REPORT CORRESPONDENT: Whether you're out of work and looking or just afraid you might be, there was simply no good news in today's report on employment. Even Keith Hall, the man who manages the numbers for the Bureau of Labor Statistics, was unable to find a glimmer of light.

KEITH HALL, COMMISSIONER, BUREAU OF LABOR STATISTICS: It's easy to sort of think of these numbers as being relatively stable. But you remember it's a stable loss. You're losing over 600,000 jobs a month is very significant. Just to put it in perspective, we've only had maybe 10 months where we've lost 500,000 jobs or more in the history of our series since 1940. This is four of the 10.

GURVEY: While the recession has been in force for more than a year, the data indicates it has many more months to go. Brian Fabbri of BNP Paribas believes the unemployment rate will reach double digits.

BRIAN FABBRI, CHIEF ECONOMIST, BNP PARIBAS: It's likely to go well over 10 percent. I've got a 10.7 percent forecast right now. The timing is always later than the cycle. In other words, the unemployment rate keeps rising even when we see the first signs of growth in some of the other sectors. So I think that happens basically in the first half of 2010.

GURVEY: The number of jobs lost since the recession began 14 months ago is 4.4 million. And with the value of homes continuing to fall and the value of stocks and other investments doing the same, analysts expect consumer spending to continue to be sluggish in the months ahead. And this is new territory for an entire generation of job seekers. Josh Feinman of Deutsche Asset Management says we forget how bad it has been before and could be again.

JOSHUA FEINMAN, CHIEF ECONOMIST, DEUTSCHE ASSET MGMT: We kind of got used to the more moderate, short-lived recessions of the early 1990s and the early 2000s. And we maybe kind of forgot a little bit about the more severe recessions of the mid-'70s and the early '80s. While I think the current episode is going to be much more like those downturns and possibly even worse.

GURVEY Productivity, interestingly, has been rising. That's usually, a good thing. But in this case, it's because the people who are working have to make up for the people who have been laid off. Scott Gurvey, NIGHTLY BUSINESS REPORT, New York.