April may be the cruelest month, but when it comes to the job market, let's hope it's better than March. Employers cut 663,000 jobs from their payrolls last month, the Labor Department reported on Friday. The unemployment rate—the slice of able workers who are unemployed but looking for work--charged up 0.4 percentage point to 8.5 percent. Two-thirds of this recession's 5.1 million job losses have occurred in the last five months, and 86,000 more jobs were lost in January than previously reported.
The worst news first. The report indicates a steep drop in hours worked. The average workweek fell 0.1 hour to 33.2 hours—the lowest level since the figure started being recorded in 1964. "The average work week is considered to be a leading indicator of labor demand," according to Ted Wieseman and David Greenlaw of Morgan Stanley Research. "So, the ongoing weakness does not auger well for a turnaround in employment growth anytime soon."
It was also pretty disheartening to see a job loss of 741,000 in January, rather than the 655,000 originally reported. The earlier numbers indicated that the worst of the payroll cuts came at the tail end of 2008. Now it's clear that the ugliest month so far has been in the new year. One additional point to keep in mind: The government measures not only the unemployed who are looking for work, but also unemployed workers who want jobs but have stopped looking, and those who are working part-time but want full-time work. The measure of all those groups reached 15.6 percent this month, a steep jump from a 9.1 percent measure in March 2008.
What kinds of jobs are being cut? A rising tide lifts all boats, and this falling tide has been equally democratic. This recession is sparing no dark corner of the labor market. Manufacturing lost 161,000 jobs across multiple component industries. Construction continued to bleed, losing 126,000 jobs in the month. Professional and business services lost 133,000 jobs, including 72,000 in temp services. Retail, financial services, and leisure and hospitality each shed at least 40,000 jobs. While healthcare continued to add jobs, the rate of job creation so far this year has been slower than it was last year.
Are there any bright spots? One good sign is that the monthly job losses were very close to expectations—even a bit less than gloomier predictions. For other bright spots, you'll have to look outside the job market to recent reports showing improvement in the housing market, construction, and some apparent recovery in the stock market.
What do experts expect for the future? "Our forecast of a 9.9 percent unemployment rate at the end of 2009 is starting to look a bit too optimistic. Indeed, it appears that the jobless rate will continue to rise at a rapid clip over the next few months and should breach 10 percent sometime in the second half of 2009" —Greenlaw and Wieseman
"We expect labor market conditions to remain appalling for many months to come, which will reinforce the decline in consumer spending that is occurring for other reasons as well." —Joshua Shapiro, chief U.S. economist at MFR
"We can't find green shoots of recovery in this report--though it would not be the first place we'd expect to see them. The jobs market will follow rather than lead. An increase in weekly hours would be a signal that the outlook is improving--but weekly hours fell today. Temporary help is another leading indicator. There is a hint, but no more than a hint, that the rate of decline in temporary help is easing (down 72,000 versus a peak loss of 90,000 in January). We do expect the economy's rate of decline to soften in the second quarter, and for it to hit bottom in the second half of the year. But we don't expect the turnaround to be rapid enough to prevent the unemployment rate hitting 10 percent before it peaks." —Nigel Gault, chief U.S. economist at IHS Global Insight
Start the discussion! Be the first to comment on this story.