Unemployment Rate Soars to 8.1%

The unemployment rate surged to 8.1% in February, the highest since late 1983, as employers cut 651,000 jobs amid a deepening recession.

Overall, the number of unemployed persons increased by 851,000 to 12.5 million in February, the Department of Labor reported today.  Over the past 12 months, the number of unemployed persons has increased by about five million, and the unemployment rate has risen by 3.3 percentage points.

“Today we learned that our economy lost another 651,000 jobs in February, bringing the unemployment rate to 8.1%,” said Secretary of Labor Hilda Solis. More than 4 million Americans “have now lost their jobs since this recession began last year, and there are now nearly three million Americans who have been unemployed for six months or more. ”

Payroll employment has declined by 2.6 million in the past four months, according to the Department of Labor.  In February, job losses were large and widespread across nearly all major industry sectors.

February’s numbers came after even deeper payroll reductions in the previous two months, based on revised figures released Friday. The economy lost 681,000 jobs in December and another 655,000 in January.

The unemployment rate continued to trend upward in February for adult men (8.1%), adult women (6.7%), whites (7.3%), blacks (13.4%), and Hispanics (10.9%).

Despite the grim numbers, there is “light at the end of the tunnel,” says John Challenger, chief executive officer of global outplacement consultancy Challenger, Gray & Christmas.

“I am hopeful that as we move into the second half of 2009 things will start to improve,” Challenger said. “Consumers will start to spend, business will start to hire, and construction workers will get back to work.”

The Obama administration, as part of the American Recovery and Reinvestment Act, has already moved to increase unemployment insurance benefits and to extend the duration of unemployment insurance.

“This data does not just represent abstract statistics,” Solis said.  “Rather it illustrates the struggles of millions of Americans who do not know how they will raise their families, or pay their bills and mortgages.  They are the central focus of this Administration’s economic policies, and why we are moving swiftly and aggressively to jumpstart job creation and grow our economy.”

The Labor Department also announced today that it is making available more than $3.5 billion dollars to states for education, training, and re-employment services.