The nation's employers are cutting back significantly, according to a monthly jobs report for March released this morning by the Bureau of Labor Statistics.
According to the monthly survey of companies, the nation has 80,000 fewer workers on payrolls this month when compared to last. The number is significantly higher than the 50,000 drop economists were expecting and is the biggest one-month contraction in the jobs market since March 2003.
The national unemployment rate — measured by a separate but simultaneously released survey of households — went up to 5.1 percent during March. The increase shows that there were significantly more Americans out of work and unable to find a job in March, an expected result of a significant economic slowdown that has employers scaling back their expansion plans.
The unemployment rate has not been this high since September 2005, when the aftermath of hurricanes Katrina and Rita led to major job losses.
Today's report presents a complete picture of the jobs situation for the first calendar quarter of the year. All told, there are 232,000 fewer jobs in the United States today than there were at the end of December. This is the first calendar quarter of net job losses since the second quarter of 2003.
The average number of jobs lost for the first three months of the year was 77,000, a substantial contrast with the average 92,000-per-month job gains the U.S. has seen during the past two years.
The construction industry was the big loser last month, shedding 51,000 jobs. Since its peak in September 2006, the sector has lost 394,000 workers.
Factory workers also saw many pink slips last month: 48,000 jobs were lost, many of them in construction-related manufacturing, such as furniture-making and wood products.
In the white-collar world, business services employment is feeling the pinch. The sector lost 35,000 workers, many at temporary help firms, which lost 21,600 jobs.
Retailers saw little change in March; jobs there were down by 12,400. Many of the losses were in areas that are likely seeing a slowdown in sales because of the housing slump: building materials and supplies, furniture stores and department stores.
Credit intermediation employment — including mortgage brokers and loan officers — saw a 5,400 downtick in jobs for an obvious reason: People and businesses are not borrowing much money these days.
Sectors that saw increases in jobs included health care (up 23,000), restaurants and bars (up 23,400), and mining (up 6,000). Why an improvement in mining? That's the category in which the government includes companies that pull oil and gas out of the ground.
If you're not already, you're likely going to start worrying about your job security in the near-term. With this level of jobs loss, many Americans are seeing their neighbors and co-workers looking for a new position. That kind of worry can have a real effect on how people behave. Expect consumer confidence to take a hit.
It also means that the Federal Reserve will almost certainly have to continue cutting interest rates when they meet next on April 29-30.
Economists say that sustained jobs losses at this level almost ensure that overall gross domestic product for the first quarter of 2008 will be in negative territory. While the jobs situation does not guarantee the step, today's report makes it much more likely that the National Bureau of Economic Research — the group officially in charge of confirming a recession – will do just that.