The Labor Department reported on the jobs situation in the U.S. and the news continued gloomy. The U.S. lost 80,000 jobs in March and the Labor Department revised the January and February reports to show a total of 67,000 more jobs lost compared to the original reports. This is the third consecutive month of job losses for the U.S. The unemployment rate also increased from 5.0% to 5.1%.

The report showed that goods producing jobs declined by 93,000 while the service sector added 13,000 jobs. Analyzing the data shows that losses were concentrated in two main areas:

• The construction industry lost 51,000 jobs.
• This is clearly a reflection of the turmoil that currently exists in the housing industry.

• Manufacturing lost 48,000.
  • The auto industry was responsible for 24,000 of the manufacturing losses. The Labor Department reported that this was primarily due to the effects of a strike at one of General Motors parts suppliers. The Labor Department reported that GM has idled almost half of its North American workforce because of the strike at American Axle & Manufacturing.

The main areas that added jobs were:

• Education and health care added 42,000 jobs
• Leisure and hospitality added 18,000 jobs
• Government added 18,000 jobs

In a separate survey that is used to determine the unemployment rate, the Labor Department reported that 197,000 workers were unable to work to due inclement weather. This is 55,000 higher than the normal average for March and may have contributed to the higher than expected job losses for March. It remains to be seen whether this will result in a revision to the March jobs data in the coming months. For workers that still have jobs, they are now working longer hours and earning more.

• Average work week increased from 33.7 hours to 33.8 hours;
• Average overtime increased from 4.0 hours to 4.1 hours
• Average hourly earnings increased .3% for the month and 3.6% for the past 12 months.

The jobs news will gather plenty of news media headlines and almost certainly add to the negative sentiment that currently exists with consumers. The data supports the view that the Federal Reserve will cut interest rates further at their April 30th meeting. Current expectations are that the Federal Reserve will lower the Fed Funds rate from 2.25% to 2.00% with a 32% probability that may be more aggressive and lower it to 1.75%.