The U.S. economy shed 80,000 jobs in March 2008, the U.S. Labor Department announced Friday, as the world's largest economy continued to weaken amid a protracted, deep housing slump.Economists surveyed by Bloomberg News had expected the U.S. economy to shed 50,000 jobs in March 2008. The U.S. lost a revised 76,000 in February 2008, up from the earlier 63,000 estimate, the Labor Department said.
Unemployment rate surges
Meanwhile, the unemployment rate surged to 5.1% in March 2008 from 4.8% in February 2008. It's the highest unemployment rate since September 2005. Economists surveyed by Bloomberg News had expected the March 2008 unemployment rate to increase to 5.0%.
Also, the number of unemployed persons increased by 434,000 to 7.8 million in March 2008. Since March 2007, the number of unemployed persons has increased by 1.1 million, and the unemployment rate has risen by 0.7 percentage points. The average work week lengthened to 33.8 hours in March 2008 from 33.7 hours in February 2008.
By sector, factory payrolls decreased 48,000. Builders cut 51,000 jobs, retail cut 12,400, and financial firms cut 5,000 jobs. On the positive side, service industries added 13,000 workers.
'Dismal March report'
Economist David H. Wang said the March 2008 jobs data "is about as bad as one could expect. It's a dismal March report."
"This is a very poor report and we are almost certainly already in a recession," Wang said. "Job conditions continue to deteriorate. This report pretty much guarantees another rate cut by the Fed at the end of the month. The only question now is whether it will be a 25 or 50 basis points cut."
Further, Wang, who still expects negative GDP growth in Q1 and Q2 2008, now said there's a 50% chance the U.S. economy will remain in recession throughout 2008. "With this report the chances of a short recession are dimming. The Fed and the Congress certainly have a lot of work ahead to help right the economy."
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