[R-G] U.S. posts worst rate of job loss since 1945
shniad at sfu.ca
Sat Mar 7 14:54:10 MST 2009
Globe and Mail Report on Business March 6, 2009
U.S. posts worst rate of job loss since 1945
Unemployment in the United States has reached a 26-year high and the recession is claiming jobs at a pace not seen since 1945, with no end in sight.
A total of 651,000 jobs were lost last month in the U.S. and the unemployment rate increased from 7.6 per cent to 8.1 per cent, the highest level since December, 1983, according to figures released Friday by the Labour Department. Canada's unemployment rate is 7.2 per cent.
The U.S. job numbers were worse than many analysts expected, and came at the end of a week of steep stock-market losses in Canada and the U.S. that took investors to multiyear lows.
“The U.S. economy is in freefall,” said Nigel Gault, an economist at IHS Global Insight. “This recession is becoming in some ways deeper than anything we've seen since the Great Depression.”
U.S. unemplyment has soared in the recession.
The net loss of 651,000 jobs in February came after even deeper payroll reductions in the prior two months, according to revised figures. The U.S. economy lost 681,000 jobs in December and another 655,000 in January.
The report contained more bad news about job losses in the previous two months. Figures for both months were revised upward to 655,000 job cuts in away from building war machines.
About 12.5-million Americans are now out of work, and the number of unemployed increased by five million in the past 12 months. Some economists expect the pace of job cuts to continue for several more months, pushing the unemployment rate above 10 per cent, a rate that only a few months ago seemed a worst-case scenario.
U.S. President Barack Obama, who has proposed a $787-billion (U.S.) stimulus plan, called the job figures “astounding.”
“This recovery plan won't turn our economy around or solve every problem,” Mr. Obama said Friday. “All of this takes time and it will take patience.”
Kelly Peach has seen the breadth of the job losses firsthand. She works at the St. Patrick Center in downtown St. Louis, which has long offered services to homeless people, drug addicts and the impoverished.
Last month the centre started helping a new group – unemployed professionals.
The non-profit organization holds seminars every Tuesday on résumé writing, interview techniques and networking for out-of-work white-collar workers. About 200 people turn out each week.
“This is a little bit of a different audience for us,” said Ms. Peach, the centre's communications director. “But it's serving a need.… Maybe we're all one paycheque away from being homeless.”
White-collar jobs have been among the most severely hit in recent months as the recession spreads throughout the economy. Roughly 180,000 professional and business jobs were lost in February, according to the Labour Department. That compared with a 168,000 drop in manufacturing employment and 104,000 in construction.
Problems in the U.S. financial sector have contributed most of the cuts, and no city has been more affected than New York, which is expected to see more than 50,000 Wall Street jobs vanish. Unemployment insurance claims illustrate much of the job destruction. The number of people with a university degree claiming unemployment insurance in New York has doubled in the last year. By contrast, the number of claimants who had less than a high-school education increased by half as much.
“We've never had anything quite like what we are seeing now in terms of the impact [of the recession] on well-educated people,” said James Parrott, chief economist at the New York-based Fiscal Policy Institute.
Damian Birkel knows all about being laid off from white-collar positions. He's been laid off four times during his career, including just six months ago. He now runs Professionals in Transition, a non-profit group in Winston-Salem, N.C., that helps unemployed white-collar workers. Attendance at the group's weekly meetings has recently jumped from around 20 to about 100. “It is unbelievable,” he said Friday.
He and others noted that many workers have been forced to take part-time jobs to make ends meet.
According to the Labour Department, the number of these underemployed people is rising almost as fast as the number of unemployed. The department said Friday the number of “involuntary part-time workers” rose by 3.7 million in the last 12 months. If they were included in the overall unemployment figure, the unemployment rate would increase to 14.8 per cent, the highest since the underemployment figures were first used in 1994.
Joel Sarfati said he is seeing professionals from all walks of life seek help at 40 Plus, a Washington organization that provides employment services for out-of-work white-collar workers.
“Normally in the past we would see people from a particular industry, now it's across the board,” said Mr. Sarfati, a retired executive who volunteers at the centre. During the recession in the early 1990s, Mr. Sarfati lost his job as a vice-president at a credit union. He said it took him nine months to find work.
“It's harder now,” he said Friday. “It takes longer and there is more competition.”
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