The U.S. Labor Department reported Friday that non-farm payrolls in the United States fell by 80,000 in March, the largest decline in five years. VOA's Barry Wood reports the employment data are further evidence of a significant economic slowdown.
The report was worse than had been expected. Not only did the economy lose jobs in March, the unemployment rate increased, rising three tenths of one percent to five point one percent. Bernie Baumohl is an economic forecaster in Princeton, New Jersey. "This is certainly alarming. It will, I think, result in a deterioration of household confidence about their future job security and income expectations," he said.
In the first three months of this year the U.S. has registered one quarter million job losses. Most have been in the long-suffering manufacturing sector, but there have also been cutbacks in services, which had been the most buoyant part of the economy. Economic forecaster Baumohl says the job data leaves little doubt that the economy is in recession.
"I believe we are now in recession. I think it is going to get worse because consumers will very likely cut back on spending as a result of the soft job market," he said.
Many forecasters believe that the recession started in January and will last at least until mid-year. The central bank has been stimulating the economy with successive interest rate cuts-taking three percentage points off short-term rates in the past year. In addition, a fiscal stimulus package will deliver checks worth several hundred dollars to taxpayers beginning in May. The measures could spur a turnaround to resumed growth later this year.
Economies worldwide are facing the dual problems of slowing growth and rising inflation. Oil prices have quadrupled in the past four years and food prices have also risen sharply. At the same time credit markets have not functioned smoothly for eight months, ever since lenders endured big losses from problems in the U.S. home loan sector.
Financial markets, however, took the U.S. job data more or less in stride. Markets closed modestly higher in Europe and U.S. stocks and bonds were mostly higher.
