US employers worried about recession slashed 80,000 jobs last month, the most in five years and the third straight month of losses.
At the same time, the national unemployment rate rose from 4.8 percent to 5.1 percent, the clearest signal yet that the economy might already be contracting. The new snapshot of the job market, released by the US Labor Department yesterday, underscored the damage that a trio of crises -- in the housing, credit and financial sectors -- has inflicted on companies, jobseekers and the economy as a whole.
The unemployment rate was the highest since September 2005, when significant job losses followed the devastating blows of Gulf Coast hurricanes.
Job cuts in both January and February turned out to be even deeper. Employers got rid of 76,000 workers in each month. The elimination of 80,000 jobs last month was the most since March 2003, when the labor market was still struggling to recover from the 2001 recession.
The economy is suffering the effects of a housing collapse, a credit crunch and a financial system in turmoil. That is causing people and businesses to hunker down, crimping spending, capital investment and hiring. Those things in turn further weaken the economy in what has become a vicious cycle.
Federal Reserve Chairman Ben Bernanke acknowledged on Wednesday for the first time that the US may be heading toward a recession.
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