Meet the Author

Murat Tasci |

Research Economist

Murat Tasci

Murat Tasci is a research economist in the Research Department of the Federal Reserve Bank of Cleveland. He is primarily interested in macroeconomics and labor economics. His current work focuses on business cycles and labor markets, labor market policies, and search frictions.

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Meet the Author

Beth Mowry |

Research Assistant

Beth Mowry

Beth Mowry was formerly a research assistant in the Research Department of the Federal Reserve Bank of Cleveland. Her work focuses on labor markets and business cycles.

04.06.09

Economic Trends

March Employment Situation

Murat Tasci and Beth Mowry

Payroll employment continued its sharp drop in March, declining by 663,000. Revisions left February’s losses unchanged at 651,000, but January’s losses increased to 741,000 (from 655,000 reported last month). Job losses were spread across all major industry groups, with the lone exception of healthcare. The unemployment rate continued to rise, increasing 0.4 percentage point to 8.5 percent, the highest rate since 1983.

Goods-producing industries shed 305,000 jobs in March, and service-providing industries lost 358,000. The losses were spread between construction (126,000) and manufacturing (161,000). These two sectors alone are responsible for half of all the 5.1 million jobs lost since the start of the recession in December 2007. Manufacturing owes three-quarters of its decline last month to durable goods.

Among service-providing industries, professional and business services sustained the heaviest losses (133,000), largely due to payroll declines in temporary help services (71,700). The trade, transportation, and utilities sector shed 112,000 jobs last month. Within this sector, the retail trade drop of 48,000 was due mostly to declines at building material and garden supply stores, electronics and appliance stores, and auto dealerships.

Motor vehicle and parts dealers continued to see high casualties (−16,000), as did truck transportation (−15,000). The financial activities sector lost 43,000 jobs last month, and leisure and hospitality lost 40,000. Education and health services stayed positive, but added just 8,000 jobs, compared to its average addition of about 40,000 each month over the past year. Healthcare carried all the gains within this sector, as education services actually experienced losses. Even though the federal government was still hiring in March, the government sector as a whole recorded 5,000 losses due to cuts at the state and local levels.

Labor Market Conditions

  Average monthly change (Thousands of employees, NAICS)
2006 2007 2008 March 2009
Payroll Employment
178
96
−257
−663
Goods-producing
5
−34
−126
−305
Construction
15
−16
−57
−126
Heavy and civil engineering
3
0
−6
−10.4
Residentiala
−5
−23
−35
−58.7
Nonresidentialb
16
6
−16
−57.3
Manufacturing
−14
−22
−73
−161
Durable goods
−4
−16
−54
−125
Nondurable goods
−10
−5
−19
−36
Service-providing
173
130
−131
−358
Retail trade
3
14
−44
−47.8
Financial activitiesc
9
−10
−19
−43
PBSd
45
25
−63
−133
Temporary help services
2
−7
−44
−71.7
Education and health services
39
43
43
8
Leisure and hospitality
33
21
−21
−40
Government
17
24
14
−5
Local educational services
6
8
1
−0.8
  Average for period (percent)
Civilian unemployment rate
4.6
4.6
5.8
8.1
  1. Includes construction of residential buildings and residential specialty trade contractors.
  2. Includes construction of nonresidential buildings and nonresidential specialty trade contractors.
  3. Financial activities include the finance, insurance, and real estate sector and the rental and leasing sector.
  4. PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services.
  5. Source: Bureau of Labor Statistics.

Private-sector employment dropped by another 658,000 in March, making it the fifth straight month in which the monthly decline exceeded 600,000. Since November 2008, the private sector has lost more than 3 million jobs. Finding larger declines in private employment would require looking all the way back to the late 1940s and mid-1950s.

The Bureau of Labor Statistics' diffusion index of employment change also crept slightly higher in March, inching from a reading of 21.4 to 22.0, meaning only 22 percent of all industries are increasing employment while the rest are making cuts. The index began back in 1991, and since then, only December 2008 and February 2009 have had worse readings.