U.S. Economy Lost 80,000 Jobs in March

The U.S. economy lost 80,000 jobs last month, according to the Labor Department's closely watched jobs report, out Friday. The figure represents the worst monthly job losses in five years.

The numbers, worse than many economists had expected, are adding to fears of recession.

The job cuts pushed the unemployment rate to 5.1 percent from 4.8 percent the previous month.

The latest snapshot reinforces fears that the subprime mortgage crisis and tighter consumer credit are taking their toll on the nation's economy.

The unemployment rate is the highest since September 2005, when significant job losses due to Hurricane Katrina.

Nariman Behravesh, chief economist at Global Insight, told NPR that he believes the biggest worry is weakness in the service sector.

"That had been the powerhouse up until recently," he said. "The service sector provides 80 percent of jobs in the U.S., so the fact that it's so weak is very troubling."

In addition, the Labor Department revised upward its figures for the last three months to show that the total jobs lost over the period is 232,000.

"It looks like a lot of businesses are pulling back and delaying hiring — or laying people off," as NPR's Chris Arnold tells Renee Montagne.

Nariman Behravesh says the figures reveal that any industry related to housing is down.

"There's a lot of pain in manufacturing; there's a lot of pain in the construction [sector]," Behravesh said.

"We're in a recession — I think the only question now is, how deep," Behravesh said. He added that so far, he expects it to be a mild one.

Analysts say the jobs report could make it more likely that the Federal Reserve will continue to cut interest rates in an effort to stimulate the economy into more growth.

From NPR reports and the Associated Press.

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