WASHINGTON — Unemployment zoomed to 8.5 percent last month, the highest in a quarter-century, as employers axed 663,000 more workers and pushed the nation’s jobless ranks past 13 million. The hard times were only expected to get harder — a painful 10 percent jobless rate before long.
The current rate would be even higher — 15.6 percent — if it included laid-off workers who have given up looking for jobs or have had to settle for part-time work because they can’t do any better. That’s the highest on record for that number in figures that go back to 1994.
“Even if the economy continues to show signs of improvement, businesses will cut jobs and trim fats to stay lean and mean,” said Sung Won Sohn, economist at the Martin Smith School of Business at California State University, Channel Islands.
So far, the public has shown great hopes for the economic policies of President Barack Obama. But those could fade quickly with more months of layoffs. In Europe for an economic summit, Obama called Friday’s unemployment report a “stark reminder” of the need for action at home and abroad.
The recession may well end later this year — Federal Reserve Chairman Ben Bernanke and many private analysts see that possibility — but rehiring historically doesn’t get going until after an economic recovery starts picking up steam. The jobless rate is expected to reach 10 percent by year’s end.
The stock market generally bottoms out before a recovery gets underway too, and stocks now have risen for four straight weeks.
The Dow Jones industrials rose 39.51 points Friday after surging 216 points on Thursday and closed above 8,000 for the first time in nearly two months.
The Labor Department report underscored the recession’s toll: a spike in the jobless rate from February’s 8.1 percent and a net loss of 5.1 million jobs since December 2007, almost two-thirds of them in just the past five months. And economists say an additional 2.4 million jobs will disappear through the first quarter of next year.
“It’s an ugly report, and April is going to be equally as bad,” said Mark Zandi, chief economist at Moody’s .
