The US Labour Department released its much anticipated report yesterday, which showed that jobs had been cut for a third consecutive month in March. Not only that, but also the decline in March, 80,000 job cuts, was the largest in five years.

This figure was much higher than the 50,000 job losses expected by analysts, and was somewhat offset by increasing government employment. Such a continuous downturn for three months is the longest since the decline seen in the early days of the Iraq war.

The Labour Department revised the first two months of the year's job losses to a total of 152,000 from a previous estimate of 85,000. The year has begun badly for the job market, with estimates that the economy has shed 232,000 jobs in the first three months of 2008.

The job cuts were not restricted to any particular sector but were widespread across industries. While the construction sector lost 51,000 jobs, manufacturing and retail accounted for 48,000 and 12,000 of the losses respectively. Business and professional employers cut staff by 35,000, while 5,000 employees at financial firms lost their jobs. Workers' average hourly wages were 3.6 percent higher than a year earlier, the smallest increase since March 2006.

The March unemployment rate jumped to 5.1 per cent from 4.8 per cent, the highest since a matching rate in September 2005. That had happened in the wake of the devastation caused by Hurricane Katrina. The unemployment rate is based on a separate survey of households, rather than the employer survey that produces the closely watched payroll numbers given before.

This survey painted an even bleaker picture than the Labour Department report. It found that the number of unemployed Americans increased by 434,000, the biggest jump since the economic slowdown in the aftermath of the 911 attacks.

For many analysts, these figures are the ultimate indication of a US recession. In fact, they think that since employment figures are a lagging phenomenon, things can only get worse in the job market. Also, some opine that job losses may, in turn, feed a recession by causing a drop in consumer spending.

The job outlook will be a key factor influencing interest rate decisions by the Federal Reserve when it meets on 29th April. Traders expect Ben Bernanke to cut the benchmark rate by half a point to encourage consumption.

Reactions from the candidates for president.

As expected, these figures drew vigorous reactions from the candidates to the presidential election. "Despite today's news, the Democrats will continue to advance their anti-growth agenda," said John McCain, the presumed Republican nominee. From the Democratic side, front runner Barack Obama called the report "the latest evidence that Washington needs fundamental change because it has failed the American people."  Main contender Hillary Clinton said "it's time the president and John McCain recognize the r-word: reality."

The continuous economic turmoil is especially bad for the Republicans, and consequently, McCain. Historical data shows that in the four presidential elections that have been held immediately after a recession in the last 50 years, the challenging party has always won.

And the challenger, now, are the Democrats.