The U.S. economy shed 651,000 jobs last month, the Labor Department reported Friday, the third-largest monthly total since the government began compiling data in 1939.
It's the first time since 1939 that job losses have exceeded 600,000 for three consecutive months, as revisions for December and January showed an additional loss of 161,000 jobs.
The record for monthly job losses was set in September 1945, when nearly 2 million people lost their jobs after the Allied forces won the most destructive war in history and American industry was transitioning from wartime to peacetime, Money Morning reported Monday. Then, in October 1949, 834,000 jobs were lost when almost all the nation's steelworkers went on strike in the final month of a short-but-brutal recession.
Another strike in July 1956 resulted in 629,000 lost jobs, but the next month the economy bounced back and 678,000 jobs were regained.
The work force is much larger today than it was in 1949 or 1956. But with about 4.4 million jobs lost since the recession began in December 2007, more than 3% of U.S. payrolls have been eliminated. That puts this recession in a category with the recessions of 1982, 1954 and 1949 when 3.1% of payrolls were cut. About 4% of U.S. payrolls were lost in 1958.
"There is not a single sign that points to a bottom yet," Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. told Bloomberg. "It is the worst recession in the post-war era."
Analysts at Wachovia Corp. (WB) estimate that 6.5 million Americans will have lost their jobs by the time the financial crisis finally subsides.
"Employment losses have deepened considerably in recent months," wrote economists for Wachovia. "With total revenue declining at its worst pace since the late 1950s, many businesses and governments are in survival mode and have no choice but to cut jobs."
The Labor Department report showed that Factory payrolls declined by 168,000 in February after falling 257,000 in January. Builders shed 104,000 payrolls after dropping 118,000 in the month Prior. Government payrolls continued to be the only bright spot, as Uncle Sam added 9,000 workers in February and 31,000 in January.
The U.S. unemployment rate surged 0.5% to 8.1% in February, the highest level in more than a quarter century.