The Labor Department reported today that overall non-farm payroll employment fell by 663,000 in March, which was similar to the 651,000 decline in February. The unemployment rate rose to 8.5 percent (the highest level since November 1983) from 8.1 percent in February. (Bureau of Labor Statistics news release here.)
While employment declines outside of manufacturing, which fell by 502,000, accelerated for a second consecutive month in March, the number of job losses within manufacturing, while still significant, moderated for a second consecutive month. In fact, the 161,000 jobs lost in manufacturing in March was actually the smallest decline in four months. Consistent with other recent indicators of the manufacturing recession beginning to bottom out, this is an early indication that the peak of the manufacturing downturn may have passed, although a recovery will not likely take place until the latter part of 2009 at the earliest.
Still, some manufacturing industries remain under particular pressure. Half of the manufacturing jobs lost last month (80,600) took place in just three of the major 19 major manufacturing industries: machinery, fabricated metals and transportation products. Since these industries primarily rely on business investment and exports, today’s report shows that these two components of the economy are continuing to decline.