5.1 Million
Jobs Lost with No Turnaround in
Sight
PHOENIX (By Peter S. Goodman and
Jack Healy, NYT) April 4, 2009 —
The American economy surrendered
663,000 more jobs in March as
the unemployment rate surged to
8.5 percent, its highest level
since 1983, the government
reported Friday.
The latest snapshot of
accelerating decline in the
national job market lifted to
5.1 million the number of jobs
lost since the recession began
in December 2007. More than two
million jobs have disappeared
over the first three months
alone.
The severity and breadth of the
job losses — which afflicted
nearly every industry outside of
education and health care —
prompted economists to conclude
an agonizing plunge in
employment prospects was still
unfolding, with no clear
turnaround in sight.
“It’s really just
about as bad as can be imagined,”
said Dean Baker, a director of the
Center for Economic and Policy
Research in Washington. “There’s
just no way we’re anywhere near a
bottom. We’ll be really lucky if we
stop losing jobs by the end of the
year.”
The pace of
retrenchment has prompted calls
among some economists for
another wave of government
stimulus spending to buttress
the $787 billion already in the
pipeline.
In January, as
the Obama administration drafted
plans for the current round of
stimulus spending, it assumed
the unemployment rate would
reach 8.9 percent by the last
three months of the year.
“We’re clearly
looking at a worse downturn than
they had been anticipating when
they planned the stimulus,” Mr.
Baker said. “We’re going to need
some more.”
But others — not
least, decision-makers inside
the Obama administration — deem
such talk premature. The jobs
report, while dreadful, landed
amid tentative signs of
improvement in some areas of the
economy, with recent snippets of
data lifting stock markets and
sowing cautious hopes the
beginnings of a recovery might
be taking shape.
The pace of
decline in auto sales, while
still falling, has slowed.
Houses have been selling in much
greater numbers in important
markets like California and
Florida, albeit at substantially
reduced prices. Consumer
spending, while far from
vigorous, appears to have
leveled off after plummeting
over the last three months of
2008.
Meanwhile, a
surge of government spending is
just beginning to work its way
through the federal and state
bureaucracies, aimed at spurring
demand for American goods and
services. This spending is
expected to support jobs in
construction and related
industries later this year. The
administration is distributing
more than $3 billion in aid to
states to train laid-off workers
for new careers in so-called
green industries, like
manufacturing solar- and
wind-power equipment, and in
health care.
“We’re attacking
this in a very aggressive way,”
the labor secretary, Hilda L.
Solis, said Friday in an
interview, arguing it was too
early to consider another round
of stimulus spending. “We will
revisit once we expend all the
money we have accrued.”
Much of the
recent indications of potential
economic improvement reflect
temporary seasonal factors
rather than a sustainable trend,
some economists argue. Housing
construction, for example, has
looked more robust in large part
because January’s construction
activity was slowed by bad
weather.
The crucial
factors assailing the economy
remain in force, with tattered
banks reluctant to lend, and
even healthy households and
businesses averse to borrowing
and spending in a time of grave
uncertainty and fear.
The very
perception millions more will
lose jobs and housing prices
will fall have turned such
outlooks into reality: As
businesses scramble to cut costs
in the face of gloomy sales
prospects, many are shrinking
work forces, removing more
paychecks from the economy and
further eroding spending power.
“There’s a lot
of survival job-cutting going on
throughout American business,”
said Stuart G. Hoffman, chief
economist at PNC Financial Group
in Pittsburgh. “There won’t be
any job growth at all this year.
The economy is far, far from
being out of the woods.”
Still, Mr.
Hoffman is among those inclined
to wait for a few more months
and hope for improvement before
unleashing a new wave of
stimulus spending.
The Treasury has
recently outlined plans for an
expanded bank rescue aimed at
lowering borrowing costs for
businesses and households, this
generating fresh economic
activity and jobs.
In London,
leaders of the world’s major
economies left a summit meeting
this week with a promise to
bolster the finances of the
International Monetary Fund by
$500 billion, lending support to
troubled economies from Eastern
Europe to Southeast Asia,
perhaps increasing now plunging
global trade and thus demand for
American-made goods.
“It’s a little
soon to conclude politically,
and I’d argue economically, we
need some more stimulus,” Mr.
Hoffman said. “You don’t just
double the dose if the patient
doesn’t immediately improve.”
Friday’s report
catalogued the myriad ways in
way American working people
remain under assault. The number
of unemployed people increased
by 694,000 in March, reaching
13.2 million. Those on
unemployment for longer than six
months reached 3.2 million.
“Almost
everyone’s being touched in some
way,” said Mark Zandi, chief
economist at Moody’s. “It seems
like every business in every
industry in every corner of the
country has a hiring freeze.
They’re just not in the mood or
position to hire. They’re not
taking résumés. They’re not
looking for people.”
Manufacturing
again led the way down, shedding
161,000 jobs in March.
Employment in construction
declined by 126,000, and has
fallen by 1.3 million since it
peaked in January 2007.
Professional and business
services employment fell by
133,000, with more than half the
losses in temporary help
services — a sign companies that
have already shifted from
relying on full-time workers to
temporary people are feeling
compelled to cut further.
In the suburbs
of Atlanta, Meg Fisher, 46, has
been looking for work since she
lost her job as a legal
secretary in the middle of
February. Her husband’s hours at
his pharmacy job were scaled
back. All told, their previous
annual income of about $79,000
has been sliced to $20,000.
Ms. Fisher is
planning to apply for food
stamps, while seeking out
freelance work as a seamstress
and knitting instructor.
“It’s not going
to replace my salary,” she said.
“It’s not even going to come
close, but it’s better than
sitting around.”
The report
reinforced the reality the pains
of the downturn have spread far
beyond the jobless. The number
of those working part time
because their hours have been
cut or they are unable to find a
full-time job climbed by 423,000
in March to reach 9 million.
In New Jersey,
Henry Perez, 34, and his family
are now living in the basement
of his sister’s house and
struggling to find work.
A refugee of
sorts from the real estate
collapse in Las Vegas, where Mr.
Perez once lived and bet big, he
has more recently worked in
online commerce and as a
marketer at an office furniture
company. But after being laid
off at the end of last year, he
has found nothing, even as he
has sharply dropped his
expectations, applying for jobs
at restaurant chains like Panera
Bread and Quizno’s.
“We’re just sitting here all day
long looking for jobs on the
computer, frustrated and scared
as hell,” Mr. Perez said. “I’m
looking for anything.”