Posted on 04/04/2003 9:18:50 AM PST by P.O.E.
WASHINGTON (CBS.MW) -- The U.S. labor market continued to convulse in March, as 108,000 jobs were destroyed following a loss of 357,000 in February, the Labor Department said Friday.
The nation's unemployment rate remained at 5.8 percent, with 8.45 million Americans officially looking for work.
"Labor market conditions remained sluggish in March," said Kathleen Utgoff, commissioner of the Bureau of Labor Statistics.
Combined with the downward revision to February's payrolls, the job losses over the past two months were about 145,000 worse than expected by Wall Street economists.
A survey of economists estimated, on average, a loss of 17,000 jobs in March. They also expected the jobless rate to rise to 6 percent.
Financial markets largely ignored the jobs report. Stocks opened marginally higher, pressuring bonds. See Market Snapshot and Bond Report.
"No one seems to care much about the lousy U.S. jobs report right now," analysts at Briefing.com said. "We think that could prove to be a costly mistake."
Investors remain focused on the cause of the recent weakening in the economy -- chiefly the war and high energy costs, said Tony Crescenzi, chief market strategist at Miller Tabak. "Developments on these fronts have clearly been very positive of late -- oil is down sharply again today, for example."
The jobs report continues a string of worse-than-expected economic reports in the past week that is trying the patience of the Federal Reserve.
On Tuesday, the Institute for Supply Management said its manufacturing index fell to 46.2 percent, the first sign of contraction in the factory sector in five months.
The Fed has expected the economy to improve once the war in Iraq is concluded, but the data have been weak enough in the months and weeks leading up to the war to make Fed policy makers nervous about the strength of any postwar bounce.
The Fed's interest rate target remains at a four-decade low of 1.25 percent. The Fed will be able to look at one more labor market report before the May 6 meeting of the Federal Open Market Committee.
Few economists expect the Fed to act immediately on the weak jobs data.
"Cutting rates further will not stimulate spending as long the war continues," said Brian Bruce, director of PanAgora Asset Management. "Cutting rates will do nothing to change the psychology of corporations at this point."
However, Lehman Brothers' economists "continue to expect the Fed to be forced to cut rates further, with the odds continuing to favor an intermeeting move," said Drew Matus, an economist at Lehman.
The weak data could also pressure Congress to pass a larger tax cut quicker.
"This news only serves to underscore the need for Congress to pass the president's growth package as soon as possible to ensure that every American who wants a job can find one," said Labor Secretary Elaine Chao.
"Despite these appalling economic conditions, President Bush is proposing more of the same -- massive tax cuts that largely benefit the wealthy," said House Democratic Leader Nancy Pelosi of California. "The administration has put forward this plan even though their own economic advisers say it won't create enough jobs to make up for those lost in the past two months, let alone the past two years."
The details of the jobs report were mixed.
Average hourly wages rose 0.1 percent to $15.10. The aggregate number of hours worked in the economy rose 0.3 percent as the average work week rose by 12 minutes to 34.3 hours.
Job losses were widespread throughout most sectors of the economy in March. Since the recession began two years ago, 2.1 million jobs have been lost.
Goods-producing industries cut 14,000 jobs in March, including 36,000 in manufacturing. No major manufacturing sector added workers. Construction added 21,000 jobs, a bounce back from February's weather-related losses of 42,000 jobs.
Service-producing industries cut 94,000 jobs. Retail firms sliced 43,000 workers, bringing the total lost since June 2001 to 470,000. Government cut 40,000 jobs, most were in local education.
Temporary help firms cut 48,000 workers in March, the largest decline since September. Temp jobs are often the first to be added and the first to be lost in today's flexible workplace. More than a half million temp jobs have been lost in the recession.
Transportation lost 14,000 workers in March, bringing the loss since January 2001 to 301,000. Half of those jobs were at airlines.
The jobless rate remained at 5.8 percent because 267,000 Americans dropped out of the labor force. Nearly a million Americans dropped out in the first quarter.
"The jobless rate failed to rise only because many unemployed workers stopped actively looking for jobs (a necessary condition to be included in the Labor Department's official labor force count)," said Jade Zelnik, chief economist at RBS Greenwich Capital. "This leaves little doubt that the underlying trend for joblessness is still upward."
More troubling, the number of Americans who currently want a job but are not actively looking because they are discouraged jumped by 558,000 in March to 5.02 million.
I think that is the case. I think many jobs are added in smaller businesses that don't normally make the news, and this occurs for alot of reasons, especially now. First, the easiest thing for someone to do who has lost a good-paying job in a "blue collar" type work is to start his or her own business. Everything from landscaping, to electrical to plumbing to small contracting---these are businesses with relatively low startup.
Second, such jobs often just don't get counted in the official stats, because they aren't "union" jobs and they slip through the cracks in the numbers.
War is viewed by economists as TEMPORARILY increasing employment only because it puts people (usually forcibly) in the army, and replaces them with other people. But research we have on wars (Civil War, WW II) shows that the "gains" typically omit the damage to property and the cost (literally, the $ cost) in lives of war. For example, most economic historians don't find much economic boost in the War of 1812, the Civil War, or the Spanish American War. There is even controversy about whether WW II gave the purported boost to the economy it is claimed.
I think it did, but only because of the pent up savings caused by the war.
16% plus the official 5.8% comes to about 21.8% actual unemployment.
Thank goodness these shameful failures stay out of sight so we can pretend everything is just peachy-keen.
Americans are not dumb enough to listen to CBS, NBC, or CNN. The investment quality of a stock won't change, it will fluxuate, and that's the time to buy. Capitalism is a wonderous thing, and it works.
But you are right, in that uncertainty has ALL the CEOs now concerned.
You do not understand. The "unemployment rate" does not equal the rate of joblessness.
People who exhausted the unemployment benefits or gave up or work a few hours a week or else are not counted toward "unemployment rate". You can have stable "unemployment rate" with shrinking economy and growing number of jobless.
They and many others are not included. For example those who managed to get 10h/week job at local gas station are not counted either.
This is like comparing apples and oranges. "Unemployment rate" means different things in different nations. Same with comparing US federal tax to the total tax in Western Europe (the last one may include equivalent our Social Security, state and other taxtes).
No, you got it completely wrong. You are confusing the artificial "unemployment rate" with the real joblessness which is growing.
I hope the majority are reporters.:~(
"welfare rolls aren't growing" much because the welfare reform made them very restrictive. There is a time limit on them and assets requirment (you have to exhaust almost all your savings and assets first).
Ding...Ding...Ding!!
I believe we have a winner!
J
The practical difference is that Germany and France after experiences of XXc provide much more generous safety net.
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