Failing Job Market Shows Signs of Growth

April 5, 2008 — -- A jobs report released Friday showed the highest level of job loss in the U.S. in five years, raising more alarms that the country is in a recession.

The Bureau of Labor Statistics reported a loss of 80,000 jobs in March, significantly higher than the 50,000 drop economists were expecting and is the biggest one-month contraction in the jobs market since March 2003.

Nationwide, the unemployment rate rose from 4.8 percent to 5.1 percent. That's the highest level since Hurricane Katrina, and it's expected to continue climbing.

"We're expecting the unemployment rate to rise to as much as five and a half percent over the course of the first half of 2008, and I think we have to put that in perspective," said Tig Gilliam, CEO of staffing firm Addeco.

The increase brings the total number of jobs lost this year to 232,000 and 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.

How Can I Find a Job in This Market?

Despite the bleak statistics, some sectors are actually showing growth, including government, education, healthcare and technology.

"This year we're expanding in all areas," said Eric Scharf, a spokesman for Cell Signaling Technology, a leading biotech firm outside of Boston, Mass. "There are senior scientists, research scientists, product developers. We're also growing in the support areas, which include IT information technology, legal, marketing, sales, customer service, and all other areas which support the core business."

Employment opportunities also vary depending on where you live in the U.S..

"In terms of regions, the strongest job performance has been in the South. They have the lowest unemployment rate now. The highest unemployment rate is in the Midwest, and that's primarily because of the exposure to manufacturing in the Midwest," explained Gilliam.

Major metropolitan cities, including New York, Dallas, Houston and Seattle have some of the lowest rates of unemployment.

Gilliam advises jobseekers first and foremost to focus on developing their own skills and professional education.

For college-educated individuals the unemployment rate is just two percent. Gilliam argues that the more skills and education you have, the better opportunity you will have to find work.

Where Were Jobs Lost?

The sectors that have been hit hardest include construction, manufacturing, business services and retail.

The construction industry alone shed 51,000 jobs last month. 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, such as 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.

What's This Mean for Me?

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 new positions. 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 almost certainly will 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.