Unemployment hits the fan in US, March figures show 80,000 more job cuts

Payrolls fell in January and February, and in Friday’s report, the Labor Department revised those declines even lower. Employers cut 76,000 jobs each of those months, far more than originally estimated.

The unemployment rate rose to 5.1 per cent from 4.8 per cent, its highest level since September 2005 amid the aftermath of the Gulf Coast hurricanes. More Americans looked for work than in February, when many simply took themselves out of the job market. But employment opportunities appeared sparse. Economists had been expecting a decline of 50,000 jobs and the unemployment rate of 5 per cent.

“Three months in a row of payroll job losses and a sizable negative revision: these are clear signs that the job market is in recession,” said Jared Bernstein, an economist at the Economics Policy Institute. “I’m hard-pressed to imagine anyone who would raise doubt to that at this point.”

The numbers suggest the Fed will extend its string of rate-cutting when it meets on April 29. Investors expect central bankers to lower their benchmark interest rate by at least a quarter point, a move that can stimulate growth.

In March, private payrolls dropped for the fourth consecutive month, as factories, home builders, and retail outlets all slashed positions. The only increases were in education and Government jobs, as well as the leisure and hospitality industries.

Wage increases continue to fall behind inflation, meaning many employees are actually earning less than a year earlier. Average hourly salaries ticked up 5 cents, or 0.3 per cent, in March, and were running 3.6 per cent higher than a year earlier. But consumer prices have risen 4 per cent over the same period.