Households feel job loss pain

04.02.09
By Timothy Jones

Households are increasingly following a strict budget in an attempt to pay off credit card debt, improve credit scores and save some money for a rainy day fund.

Many American families are also using a budget to plan for the undesirable situation where one or more breadwinners in the household lose a job.

Consumers wondering how bad the employment outlook is are gaining little comfort from the most recent jobs report on the private sector.

A new employment report released yesterday by ADP Employment Services and Macroeconomic Advisers shows that 742,000 jobs were cut in March - significantly higher than a number of economists expected.

Before the report was released, a survey of 30 economists by Bloomberg News predicted a decline of roughly 663,000 jobs. Now, economists, businesses, and American families are anxious to see the government's job report set to be released Friday morning.

What types of companies were hit the hardest last month?

According to the ADP National Employment report for March, of the 742,000 jobs lost, 330,000 were at medium-sized business.

The services sector also saw payrolls decline significantly - by 415,000. And men and women working at manufacturing sites may show increased worry over job security - the sector lost 206,000 positions last month.

With both the residential real estate market and commercial real estate market slumping, it comes as little surprise that the construction industry saw a job loss of 118,000 last month and over one million jobs shuttered since January 2007, according to the ADP report.

Joel Prakken, chairman of Macroeconomic Advisers, said that although stock prices and consumer spending activity seem to be reaching all-time lows, recovery is likely not yet in sight. He expects employment to "remain very weak for at least several more months."

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More consumers worry about job security.