Friday, April 04, 2008
Now we know why Fed Chairman Ben Bernanke was such a Negative Nellie this week when testifying before Congress - after the latest employment report, it looks as though the wheels are falling off the economy.
A total of 80,000 jobs were lost in March and nonfarm payrolls declined by another 67,000 in the combined revisions for January (from -22,000 to -76,000) and for February (from -63,000 to -76,000).
This brings the total job loss to 232,000 in 2008 and, excluding government jobs, the year-to-date figure drops to -288,000.
Just in case you need to be reminded, 2008 is an election year.
The unemployment rate surged from 4.8 percent to 5.1 percent and, after declining somewhat in recent days, expectations for further rate cuts by the Federal Reserve have now increased. With short-term interest rates at just 2.25 percent, there's not much room to cut, but things are looking increasingly bleak and desperate times call for desperate measures.
The Fed may need some bigger mops to clean up after the latest bursting bubble.
Job loss leaders were in the usual areas - construction and manufacturing - along with a sharp decline in professional and business services, mostly temporary help.
Within the construction category, jobs in both residential and nonresidential sectors are now being slashed with 31,000 fewer residential construction jobs in March and 16,000 fewer in nonresidential work.
Employment at food service and drinking establishments gained 23,000 last month - this sub-category, within the leisure and hospitality category, has been a stalwart in job creation over the last few years. The March total was below average, but still quite strong.
And the health care industry continues to create an outsized number of jobs - 33,500 in March and a whopping 452,000 on a year-over-year basis.
Overall, this is quite a dismal report and, if this recession is anything like the last recession (see the first chart above) things could get a whole lot worse in short order.