The US unemployment rate hit a 25-year high of 8.1 per cent in February as employers buckling under the strain of a recession that shows no sign of ending axed 651,000 jobs, government data showed today.
Adding to the gloom, a combined 161,000 more jobs were lost in January and December than previously believed. February's decline was close to economists' forecast for a 648,000 drop.
The Labour Department said the unemployment rate in February was the highest level since December 1983, and it was above market forecasts for a rise to 7.9 from January's 7.6 per cent.
January's job cuts were revised to show a steep decline of 655,000, while December's payrolls losses were adjusted to 681,000, the deepest since October 1949. Since the start of the recession in December 2007, the economy has purged 4.4 million jobs, with more than half occurring in the last 4 months.
Job losses in February were broad based, with only government, education and health services adding jobs.
"Since the recession began, the rise in unemployment has been concentrated among people who lost jobs, as opposed to job leavers or people joining the labour force," said Bureau of Labor Statistics Commissioner Keith Hall
The manufacturing sector shed 168,000 jobs in February, after eliminating 257,000 positions the prior month. Construction industries bled 104,000 jobs in February after losing 118,000 in January.
The service-providing industry slashed 375,000 positions after shedding 276,000 in January.
Companies struggling with falling revenues and tight profit margins are slashing jobs in huge numbers, a step that is forcing households to further scale back spending, creating a vicious cycle for the withering economy.
In January, the length of the working week was steady at 33.3 hours, matching a record low registered in December. The factory workweek fell to 39.6 hours.
Weekly overtime hours at factories slipped to 2.6 hours in February from 2.8 hours in January. Average hourly earnings inched up to $18.47 from $18.44 in January.
The government is rolling out a $787bn stimulus package to try and break the economy's alarming downward spiral. But the success of this plan depends on stabilising the fractured financial system and collapsed housing market.Reuse content