The nation’s unemployment rate jumped to 8.5 % in March, the highest since late 1983, as a wide swath of employers eliminated 663,000 jobs. The only job gains were in education and health services, where even the government shed jobs. The number of unemployed people climbed to 13.2 million in March. In addition, the number of people forced to work part time for additional monetary funds rose by 423,000 to 9 million. If part-time and discouraged workers are factored in, the unemployment rate would have been 15.6% in March, the highest on records dating to 1994, according to Labor Department data released Friday. Employers cut 651,000 jobs in February when the jobless rate was 8.1 %. January’s job losses, however, were revised much higher, to 741,000 from 655,000; with deeper job cuts in construction and professional and business services. January marked the worst payroll losses since the fall of 1949.

The average work week in March dropped to 33.2 hours, a new record low. Since the recession began in December 2007, the economy has lost a net total of 5.1 million jobs, with almost two-thirds of the losses occurring in the last five months. Through the first quarter, the economy has lost 2 million jobs.

The job market traditionally doesn’t rebound until well after a recovery starts as there is a lag effect. But the stock market generally bottoms out before the economy, and stocks have been rising for weeks after hitting decade lows at the beginning of March. The Dow’s total gain since March 6 is about 21%; its biggest since 1938 during that time span. The S&P up 23.2% and the Nasdaq up 25.3%. Has the market bottomed? Or has short covering turned into market jubilation? We head into earning season this week which will truly test the sentiment on the street.

Most observers expect the employment situation to worsen throughout 2009, with unemployment reaching double figures. The lack of job security has created a terrible spiral in the economy, hurting consumer spending which causes further cutbacks. Wages have also tumbled. You have approximately four people competing for every available job in the market. The access supply of labor has driven employee wages down.