663,000 jobs cut in March; workers' hours at record low

WASHINGTON -- The nation's unemployment rate shot up to 8.5% in March as employers shed 663,000 jobs and cut workers' hours to a record low, the Labor Department said Friday in a report showing continued rapid deterioration in the job market.

A record 13.2 million Americans were out of work last month. Firms have cut 5.1 million jobs since the recession began in December 2007, with nearly two-thirds of the cuts happening in the last five months.

The unemployment rate was up from a seasonally adjusted 8.1% in February, and at 8.5% it is the highest since November 1983. A year ago the rate was 5.1%.

For the first time since 1985, less than 60% of the U.S. population was working.

And workers who held onto their jobs weren't having it easy. Non-supervisory employees worked on average 33.2 hours a week last month, lowest since the government began measuring hours in 1964, as businesses cut employees' hours. A record 9 million people were working part time in March even though they wanted full-time work.

The so-called rate of underemployment, which includes people who working part time but who wanted to work full time, and those who dropped out of the labor force because they gave up looking for work, was 15.6% in March. That was up from 14.8% in February and the highest since those records began in 1994.

Labor Secretary Hilda Solis said the administration is working to help those who are losing their jobs, including working with state lawmakers to extend unemployment benefits to a wider pool of workers. Congress in the stimulus bill provided $7 billion to states that expand benefits to more workers, such as those that work part time or were at their job for a short period of time before being laid off. Currently the majority of unemployed workers are not eligible to collect state benefits.

Other focuses include retraining and maximizing the number of jobs created by stimulus spending on infrastructure, the secretary said.

"The president and I are very concerned about the continuing drop off in employment," Solis said in an interview.