Unemployment Climbs to 8.5% in March
The report from the Labor Department showed that construction companies, factories, retailers, professional and business services and leisure and hospitality services all cut jobs. Even the government eliminated some 5,000 jobs. Education and health care were the few industries to show slight job gains.
“In March, job losses were large and widespread across the major industry sectors,” the report’s summary said.
The new figures bring the total number of unemployed people in the U.S. to 13.2 million. If part-time and “discouraged” workers — those who have been unable to find new jobs — are factored in, the unemployment rate would have been 15.6 percent in March.
The 663,000 jobs lost last month proved slightly higher than many economists had predicted. Analysts surveyed by Reuters had forecast that 650,000 non-farm jobs would be lost in March and most predicted that the unemployment rate would rise to 8.5 percent from 8.1 percent in February.
“After accelerating job losses through the end of the year, looks like we crescendoed in the first quarter,” said Diane Swonk, chief economist at Mesirow Financial. “We have seen some anecdotal reports that employers are saying they are expecting layoffs to abate going forward.”
Listen to Swonk’s reaction to the new jobs report:
The Bureau of Labor Statistics also made significant revisions of its data for January to show job losses of 741,000 that month, the biggest decline since October 1949.
Since the recession began in December 2007, the economy has lost a net total of 5.1 million jobs, with almost two-thirds of the losses occurring in the last five months.
The government report also examined the long wait many job hunters are facing in the quest for new employment.
“In March the number of individuals experiencing long spells of joblessness rose by 265,000 to 3.2 million. Nearly one in four of the unemployed had been jobless for 27 weeks or more, the highest ratio since mid-1983,” Bureau of Labor Statistics Commissioner Keith Hall said in a statement.
Many economists predict the unemployment rate will hit 10 percent at the end of this year. The Federal Reserve has said unemployment will remain elevated into 2011.
“There’s going to quite a long haul before you see the jobless rate head down,” Bill Cheney, chief economist at John Hancock Financial Services, told the AP.
In late February, Federal Reserve Chairman Ben Bernanke told lawmakers that the economy is likely to keep shrinking in the first six months of 2009 but that he hoped the recession would end this year.
The jobs report comes on the heels of other recent indicators, including housing starts and other data, which have hinted at new signs of life in the recession-weary economy. Those reports, along with new government moves to help rescue troubled banks or redirect faltering industries, have helped buoy the stock market in recent weeks.
The Labor Department also reported this week that all 372 U.S. metropolitan areas the agency tracks saw their jobless rates rise in February from a year earlier. Indiana’s Elkhart-Goshen and North Carolina’s Hickory-Lenoir-Morganton, both hammered by manufacturing layoffs, registered the biggest annual increases.