Payrolls sink 651,000, jobless rate soars to 8.1%

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The weakness in U.S. labor markets has gathered extraordinary momentum, wiping away millions of jobs over the past four months alone, the Labor Department reported Friday.

The U.S. economy lost 651,000 jobs in February, the fourth month in a row where job losses were near or above 600,000.
The unemployment rate soared to 8.1% in February, the highest rate in over 25 years.

Job losses in February were close to expectations, while the unemployment rate was above forecasts of 8.0%. See Economic Calendar.
The economy has lost 4.4 million jobs since the recession began in December 2007, with more than half coming in the last four months. Read full report.
The stock market moved higher in opening trading on relief that the report was not worse.

Treasurys fell pushing yields up for the same reason, traders said. Read Bond Report.
Payrolls fell by 655,000 in January and by 681,000 in December, revised down by 161,000 from previous estimates.

The job losses in December were the biggest monthly decline in jobs since October 1949, when half a million steelworkers went on strike for higher pay.
The consensus of private forecasters is for the unemployment rate to get close to 9% next year, with some forecasters looking for a 10% rate. The Federal Reserve doesn't expect the unemployment rate to fall below 7% until 2011.

The report raised doubt about expectations that the economy would recover
sometime this year.
"Combing the details of the employment report offers little hope of improvement any time soon," wrote Richard Moody, chief economist at Mission Residential, in a note to clients.
Job losses were widespread across industries. Only education and health services reported job gains.

According to the survey of business establishments, 660,000 jobs were lost in the private-sector in February. Goods-producing industries shed 276,000 jobs, while services lost 375,000.

Construction employment fell by 104,000 in February and the industry has shed 904.000 jobs since the recession began.
A leading indicator of labor market conditions -- temporary help services -- saw 78,000 jobs lost in February.

Other large job losses in February occurred in transportation, financial services, and retail and wholesale trade.
A separate survey of households showed that employment fell by 351,000 in February. Unemployment rose by 851,000.

The unemployment rate for African Americans rose to 13.4% in February, which is the highest rate since December 1993. Teenage unemployment rose to 21.6%.
Average hourly earnings rose by 3 cents, or 0.2%, to $18.47 an hour, in line with expectations. Average wages have risen 3.6% in the past year.
The average workweek held steady at 33.3 hours for the third straight month.

The index for hours worked fell by 0.7%. Hours in the factory sector dropped by 2% over the month.
The number of workers experiencing long spells of joblessness, defined by the government as 27 weeks without work, has risen to 2.9 million in February, up 1.6 million since the start of the recession.

The number of persons working part time who would prefer to be working full time jumped 787,000 in February to 8.6 million. This category has risen by nearly 4 million since the recession began.
About 2.1 million other workers are classified as only marginally attached to the labor force.

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