March 7, 2008 Employers slash 63,000 jobs in February, most in 5 years

WASHINGTON (AP) - Employers slashed jobs by 63,000 in February, the most in five years, the starkest sign yet the country is heading dangerously toward recession or is in one already.

The Labor Department's report, released Friday, also showed that the nation's unemployment rate dipped to 4.8 percent as hundreds of thousands of people - perhaps discouraged by their prospects - left the civilian labor force. The jobless rate was 4.9 percent in January.

Job losses were widespread, with hefty cuts coming from construction, manufacturing, retailing and a variety of professional and business services. Those losses swamped gains elsewhere including education and health care, leisure and hospitality, and the government.

The latest snapshot of the nation's employment climate underscored the heavy toll of the housing and credit crises on companies, jobseekers and the overall economy.

The report also showed that the job losses suffered in January were worse than the government first reported. Employers cut 22,000 jobs, versus 17,000.

It was the first monthly back-to-back job losses since May and June 2003, when the job market was still struggling to recover from the blows of the 2001 recession.

The health of the nation's job market is a critical factor shaping how the overall economy fares. If companies continue to cut back on hiring, that will spell even more trouble.

Friday's report was much

weaker than economists were expecting. They were forecasting employers to boost payrolls by around 25,000. However, they were expecting the jobless rate to edge up to 5 percent. The reason why the jobless rate went down, rather than up, is because so many people stopped looking for work and left the labor force.

Workers with jobs, however, saw modest wage gains.

Average hourly earnings for jobholders rose to $17.80 in February, a 0.3 percent increase from the previous month. That was on target with economists' forecasts. Over the last 12 months, wages were up 3.7 percent. With high energy and food prices, though, workers may feel squeezed and feel like their paychecks aren't stretching that far.

(Copyright 2008 by The Associated Press. All Rights Reserved.)