04.06.09
Economic Trends
March Employment Situation
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
|
- Includes construction of residential buildings and residential specialty trade contractors.
- Includes construction of nonresidential buildings and nonresidential specialty trade contractors.
- Financial activities include the finance, insurance, and real estate sector and the rental and leasing sector.
- PBS is professional business services (professional, scientific, and technical services, management of companies and enterprises, administrative and support, and waste management and remediation services.
- 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.