The number of jobs in the nation fell last month for the first time in almost five years according to the Labor Department's latest employment report.
17,000 jobs were lost, led by losses in construction, manufacturing, good producing industries and state government.
Today’s report is the clearest signal yet that the economy has entered a recession and that Congress needs to include a temporary extension of unemployment insurance benefits in its fiscal stimulus package.
Averaging over the past three months, payrolls grew by a scant 42,000 jobs per month, compared to 169,000 a month over the comparable period one year ago.
The Labor Department also sharply lowered its estimates for employment in 2007 as a whole.
In November, for example, the government had said 115,000 jobs were created. That number was reduced to 60,000 in the latest report, far short of the 150,000 jobs that are required to absorb new workers entering the workforce.
Long-term unemployment—the share of workers jobless for at least half-a-year—jumped to 18.3%, compared to 16.2% one year ago. At the start of the last recession in March 2001, in contrast, the long-term unemployed made up only 11.1 percent of all unemployed workers.
The number of long-term unemployed is higher today (1.38 million) than it was in March 2002 (1.33 million), when Congress first enacted extended unemployment compensation after the 2001 recession. Unemployment benefits are cut off after 26 weeks in most states.
Another important indicator of slack in the job market was the increase in the share of involuntary part-time workers, a change that is also evident in the increase in the under-employment rate, the BLS's most comprehensive measure of under-utilization. At 9.0% last month, the underemployment rate was at its highest level in over two years and significantly above its year-ago level of 8.3%.
Workers’ salaries have also fallen in the last 12 months. The average hourly wage for rank-and-file workers — about 80 percent of the total work force — rose 3.7 percent since last January, below the pace of inflation.
These developments are a source of concern not only for these families but for the economy as a whole. They are a clear sign that extending unemployment benefits must be part of any fiscal stimulus package.
A temporary extension of unemployment insurance benefits would help the people hardest hit by the weakening economy and would boost the economy with one of the fastest acting and most effective forms of stimulus available. Unlike tax rebates, which can’t begin to go out until mid-May, extended unemployment benefits could start reaching workers and boosting consumption within 30 days.
The Senate has included extending unemployment benefits in its stimulus package. It is important for American workers and the economy that it be included in the final stimulus legislation.