Unemployment rate climbs in February

The U.S. unemployment rate increased from 7.6 percent in January to 8.1 percent in February—the highest since 1983, according to MSNBC.com.

Employers cut 651,000 jobs in February, which was worse than analysts expected. Since the recession began in December 2007, 4.4 million jobs have been lost; more than half of that decline happened during the past four months. There are now 12.5 million unemployed people in the U.S., and another 8.6 million people have been forced to work part time.

“There is no light at the end of the tunnel with these numbers,” says Nigel Gault, economist at IHS Global Insight, Lexington, Mass. “Job losses were everywhere, and there’s no hope for a turnaround anytime soon.”

Factories were hit hard in February, losing 168,000 jobs. Construction employment fell by 104,000 jobs; professional and business services fell by 180,000 jobs; financial companies fell by 44,000 jobs; and retail employment fell by 40,000 jobs.

“This is basically cleaning house for a lot of firms,” says John Silvia, chief economist at Wachovia Corp., Charlotte, N.C. “They are using the first quarter to cut back employment and figure out what they want.”

Employment grew in education and health services, as well as government.

The Federal Reserve believes the unemployment rate will remain elevated until 2011, and economists say the job market may not get back to normal—meaning a 5 percent unemployment rate—until 2013.

Date : 3/9/2009