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NPR's business news starts with job losses throughout the economy.

The government's monthly jobs report is out this morning and it's worse than economists were expecting. The reports shows that employers slashed 63,000 jobs last month. That make two months in a row that payrolls have shrunk and the economy is now losing jobs at a faster pace.

As you might expect, Wall Street is not reacting well. The Dow Jones Industrial started the day down. In currency trading the dollar fell to a new record low against the euro. We have details now from NPR's Jim Zarroli. And where were these jobs lost?

JIM ZARROLI: Yeah. Well, this report really was something of a surprise. Economists hads been expecting that we would see a small gain in jobs. Instead, we just saw losses across - almost across the board. Manufacturing down, 52,000 jobs, construction down. Construction has now lost 331,000 jobs in a year and a half. The only reason things weren't worse last month is because government hiring was up. And also not only did the economy lose jobs last month, but we also had fewer jobs created than the government first thought in the two months before that. This was the first time in five years we have had back-to-back job losses. And a lot of these jobs aren't going to come back any time soon. The Labor Department said they were concentrated among people who don't have much of an expectation they're going to be recalled.

INSKEEP: Well, now, was there some countervailing good news the economists were expecting to balance losses in places like construction? Good news that just didn't happen?

ZARROLI: Yeah. Well, I think that's the case. I think we're in a period now where there's just so much uncertainty and people - I think economists don't know what to expect. This just suggests that a recession is much more likely than we thought. You can almost hear economists kind of rushing back to their desks this morning to take another look at their growth models.

We have just had a lot of bad news in the past week - housing, the credit markets. Yesterday we learned that the foreclosure rate hit an all time high during the last part of 2007. We're seeing weaknesses in the credit markets. We had a major lender, Thornburg, which lends money for jumbo mortgages, saying it was having trouble meeting its debt obligations. We've seen big drops in consumer spending, consumer confidence. And now, based on this report, it looks like the slowdown is hitting the job market too.

INSKEEP: Is there room for the Federal Reserve to drop interest rates yet again?

ZARROLI: Yeah. The Fed, of course, as you suggest, has already cut rates. It hasn't had a lot of impact so far, but it often takes, you know, a year or more before interest rate cuts really filter through the economy. Everybody is expecting the Fed to do so again, and that's - this just makes that more likely.

We also had this action this morning, the Fed taking steps to increase the amount of money going into the banking system, increase the amount of money at auctions to banks later this month. That's just done in an effort to increase liquidity in the system.

INSKEEP: Jim, there's one quirk in the statistics I want to make sure that we understand here. Sixty-three thousand jobs disappeared, a net loss of jobs, more jobs eliminated than created in the economy in this month. And yet we're told that the unemployment rate, the percentage of people out of work, actually fell to 4.8 percent. How can both of those things be true?

ZARROLI: Yeah. It's a discrepancy we've seen before. The unemployment rate doesn't measure how many people are unemployed. It measures how many people are unemployed and actively looking for work. And the Labor Department said last month several hundred thousand people quit looking for work. These are presumably people sort of on the fringe of the labor market. Retired people, students.

When the job market gets weak, they get discouraged, they stop looking, and the unemployment rate falls. That's apparently what happened last month.

INSKEEP: So this is a case where a dropping unemployment rate is actually grim news.

ZARROLI: Exactly.

INSKEEP: Jim, thanks very much.

ZARROLI: You're welcome.

INSKEEP: That's NPR's Jim Zarroli giving us the latest news on the economy. We're told that the unemployment rate has dropped to 4.8 percent but the economy is actually creating fewer jobs, and that loss is 63,000 thousand jobs.

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