Employment continued to fall sharply in March, according to a report released by the Labor Department on Friday, with the decrease in payroll employment coming in roughly in line with economist estimates. The unemployment rate subsequently jumped to a twenty-five year high.
The report showed that non-farm payroll employment fell by 663,000 jobs in March following an unrevised decrease of 651,000 jobs in February. The drop in jobs came roughly in line with economists' expectations of a decrease of 658,000 levels.
While the decrease in jobs in February was unrevised, the drop in jobs in January was revised to 741,000 from the 655,000 that had been reported previously.
With the continued decrease in jobs, the unemployment rate rose to 8.5 percent in March from 8.1 percent in February, in line with expectations. The increase lifted the unemployment rate to its highest level since November of 1983.
The Labor Department noted that the job losses in March were large and widespread across the major industry sectors.
While the goods-producing sectors lost 305,000 jobs during the month, the service-providing sectors lost 358,000 jobs.
The manufacturing, professional and business services, and construction industries showed some of the biggest decreases in jobs. At the same time, employment in the education and health services industry edged up by 8,000 jobs.
The Labor Department added that the number of long-term unemployed, which represents those who have been jobless for 27 weeks or more, rose to 3.2 million in March and has increased by about 1.9 million since the start of the recession in December 2007.
Additionally, the report showed that average hourly earnings edged up 0.2 percent to $18.50 in March from $18.47 in February. Average hourly earnings were up 3.4 percent year-over-year.
While the employment data is generally seen as a lagging indicator of the strength of the economy, the continued decrease in jobs can still negatively impact consumer confidence.
Subsequently, with people worried about losing their jobs less likely to make discretionary purchases, the perception of a weak labor market can still hurt consumer spending, which accounts for about two-thirds of economic activity.
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