Sunday, April 5, 2009

Jobless rate in US hits 8.5 per cent

THE US unemployment rate soared to 8.5 per cent last month, a 25-year high, as employers slashed jobs and cut workers' hours to the lowest level on record.

In a report underscoring the economy's distress, the US Labor Department said employers slashed 663,000 jobs in March and revised prior data to show job losses of 741,000 in January, the biggest decline since October 1949.

February's drop in non-farm payrolls was unrevised at 651,000.

But coming in the wake of recent economic data that has surprised on the upside, the report did little to alter perceptions that the economy's downward momentum is slowing, as unemployment tends to peak well after a recession ends.

The economy, now in its 16th month of recession, remained on track to recover in the second half of this year and the intense phase of job losses is likely over, economists said.

"I don't think the recovery for the end of this year is derailed by this jobs report. These are lagging indicators. Job losses are down significantly from January, which may very well be the peak," said Bernard Baumohl, chief global economist at the Economic Outlook Group in Princeton, New Jersey.

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