No Sign of Recovery In Job Market
663,000 More Jobs Lost in March
San José, CA – On April 3 the monthly jobs report by the Department of Labor showed that the official unemployment rate jumped from 8.1% in February to 8.5% in March, while the economy lost another 663,000 jobs. In addition, the number of jobs lost in January was increased by 90,000, to 741,000, which was the worst one-month job loss in 60 years. So far the economy has lost 5.1 million jobs since the recession began, making this the worst recession in terms of jobs lost in more than 50 years.
Job losses spread across nearly every sector of the economy. Construction, manufacturing, trade, finance, hotel and restaurant, and government all lost jobs. Even education, which was gaining jobs up through February, lost jobs as budget cuts spread. This left only health care as a sector with job gains, which came to only 13,000 in March. There was a very large job loss in temporary help services – 72,000 jobs lost – which shows more job losses to come. Temp jobs are usually the first to go and first to come back as businesses try to hang on to permanent workers during recessions and not make permanent hires during expansions.
Another sign of more unemployment pain to come was the record numbers collecting unemployment insurance. Another 669,000 people applied for unemployment insurance benefits in the last week of March. The total number collecting unemployment benefits rose to 5.73 million in March, and there were 1.5 million more collecting extended unemployment benefits, for a total of more than 7 million.
Regular unemployment benefits are for 26 weeks or one-half a year. With the growing job losses due to the recession, Congress added an additional 20 weeks of benefits in 2008, with still another 13 weeks available in states with the highest unemployment rates. So far 18 states have these extended benefits, which is twice the number in previous recessions in 2001 and 1991.
But despite up to almost 14 months of benefits, a growing number of jobless workers could run out of benefits later this year. There are now more than 3 million workers who have been out of work for more than six months as it becomes harder and harder to find a job.
It is no wonder that more and more people are giving up on finding a job. In March some 166,000 people gave up looking. The Labor Force Participation Rate, or percentage of adults who are working or looking for work, fell to 59.9%, the lowest since 1985. The underemployment rate, which includes people working part-time who can’t find full-time work, as well as the unemployed who haven’t been looking, grew to 15.6% in March.
The growing job losses are causing record numbers of delinquencies and charge-offs of consumer loans. The Federal Reserve report on consumer loan problems showed 4% of all (non real estate) consumer loans and 1.6% of mortgage loans were charged off by banks that have given up on collecting them. Another 4% of consumer loans and 6% of home mortgages were late.
Recently the stock markets have been on a tear, with wealthy investors optimistic that the economy is bottoming out. But for working people, there is no end to the recession in sight. With job losses piling up month after month and with a large number of people set to lose their unemployment benefits, workers cannot afford to wait for the federal government’s economic stimulus plan to kick in. Even if the stimulus works as claimed, it will only provide 3 to 3.5 million jobs over the next two years. In the meantime, the economy has lost more than 3 million jobs in the last five months alone. We need a government jobs program that can guarantee jobs or income for all.