U.S. unemployment is the highest in 25 years

Posted on Friday, March 6, 2009
U.S. unemployment is the highest in 25 years
By Kevin G. Hall | McClatchy Newspapers

WASHINGTON " Employers shed another 651,000 jobs in February, driving the unemployment rate up another half a percentage point to 8.1 percent, the highest rate in 25 years, the government reported Friday in the latest sign that the deep U.S. economic recession isn't abating.

Underscoring the rapid pace of economic decline, the Labor Department's Bureau of Labor Statistics said that 2.6 million jobs had been lost in the past four months alone. Over the past 12 months, the number of unemployed has increased by about 5 million.

The monthly Employment Situation Summary also revised the jobs numbers for December and January downward, for a combined 161,000 more lost jobs than had been reported earlier. This pointed to a steeper economic contraction early this year than all but the gloomiest of forecasters had projected.

"In February, job losses were large and widespread across nearly all major industries," the BLS report said.

The professional and business services sector led the job losers, shedding a whopping 180,000 jobs. Those who make things fared little better, with manufacturers dropping 168,000 positions. The construction industry's deep slump showed little letup, as builders and contractors got rid of 104,000 more jobs.

The financial sector rid itself of 44,000 employees as bank failures, mergers, the housing slump and financial sector turmoil continue. Retail sector employment fell by 40,000.

The only bright spot again was health care, which added 27,000 jobs last month.

"There are now more unemployed Americans (12.5 million) than at any time in the postwar era, breaking a previous 1982 record of 12.1 million," said the National Employment Law Project, which advocates for better unemployment benefits. "To make matters worse, there are already 2.9 million Americans out of work for six months or more " a number which is sure to grow as the recession deepens."

"The headline employment decline didn't meet the worst fears, but that doesn't make this report anything but awful. The labor market remains in free-fall," Nigel Gault, the chief U.S. economist for forecaster IHS Global Insight, wrote in a note to investors. He added that there "is no silver lining here. The broadest measure of underemployment, which includes people who have stopped looking for a job and people who are working part time who would rather be working full time, jumped by almost a full percentage point this month to 14.8 percent from 13.9 percent."

Although the number of unemployed people is a postwar record, it isn't a record in terms of the percentage of the work force.

The head of the White House Council of Economic Advisers urged patience Friday. Christina Romer, appearing on CNBC television shortly after the government numbers were released, said the bank rescue efforts and the newly passed economic-stimulus program would begin to pay off in the months ahead.

"I feel we have put in place an incredibly comprehensive package," Romer said, suggesting that things will begin to turn around by summer.

ON THE WEB

Bureau of Labor Statistics jobs report
http://www.bls.gov/news.release/empsit.nr0.htm