The U.S. unemployment rate leapt to a new 25-year high of 8.5% in March as recession-battered employers shed another 663,000 jobs, the Labor Department reported on April 3. The jobless rate is the highest since November 1983.
The monthly snapshot of the labor market, seen as one of the best indicators of economic momentum, showed "widespread" losses across major sectors of the economy as the jobless rate rose from 8.1% in February.
Revised data showed January job losses rose to 741,000, from an earlier estimate of 655,000 lost. The loss for February remained unchanged at 651,000.
The total number of unemployed rose to 13.2 million in March, with the number of long-term unemployed -- jobless for 27 weeks or more -- rising to 3.2 million.
In March, the goods-producing sector lost 305,000 jobs including 161,000 in manufacturing and 126,000 in construction.
"Manufacturing continues to take the brunt of the job reductions in March and declined at a 16.8% annual rate in the first quarter. Within manufacturing the worst cutbacks (in percentage terms) are occurring in wood, metal, machinery, motor vehicles, furniture, textile , apparel, and plastics," said Daniel J. Meckstroth, Chief Economist for the Manufacturers Alliance/MAPI. "In addition to the major downturns in consumer spending, especially for big ticket items, the slack in capacity utilization is pulling down capital equipment and nonresidential construction spending, and to make matters even worse there is a major inventory destocking taking place."
The service sector, which provides the majority of US jobs, shed 358,000 positions including 43,000 in the financial sector.
The only sector to add employment was education and health care, up 8,000, while government employment fell by 5,000.
The average work weak contracted to 33.2 hours from 33.3 hours, which analysts said could mean lower production and income, hurting the economy.
Since the recession began in December 2007, a staggering 5.1 million jobs have been lost, with 3.3 million occurring in the past five months.
The weak labor market offered a clouded outlook for what some analysts say is a "bottom" for an economy ravaged by a housing meltdown that has hammered the banking sector and squeezed credit.
The U.S. economy contracted at a steep 6.3% pace in the fourth quarter as the recession deepened. The government will estimate first quarter output later this month.
Copyright Agence France-Presse, 2009