INSTANT VIEW: U.S. payrolls drop more than expected in March

NEW YORK (Reuters) - U.S. employers cut payrolls for a third month in a row in March, slashing 80,000 jobs for the biggest monthly job decline in five years as the economy headed into a downturn, government data on Friday showed.

KEY POINTS: * The Labor 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 March unemployment rate jumped to 5.1 percent from 4.8 percent, the highest since a matching rate in September 2005. * The March job report was more bleak than expected. Economists polled ahead of the report forecast a decline of 60,000 in non-farm payrolls and a rise in the unemployment rate to 5 percent. * During the first quarter of this year job losses averaged 77,000 a month, compared to average monthly gains of 76,000 in the last half of 2007, according to Keith Hall, Bureau of Labor Statistics Commissioner. * Job losses were widespread during the month, with the biggest losses in the construction and manufacturing sectors.

COMMENTS:

ERIC WITTENAUER, ANALYST AT WACHOVIA SECURITIES, ST. LOUIS:

"The payrolls data were initially supportive as the dollar weakened. But economic concerns tend to weigh on a market that has weak demand and gasoline supplies looking robust ahead of driving season."

ROBBERT VAN BATENBURG, HEAD OF GLOBAL RESEARCH, LOUIS CAPITAL MARKETS, NEW YORK

"Based on the labor market, you are looking at a recession. The only silver lining is in the household survey, it registered a modest 24,000 decline in employment versus 250,000 decline in February. But it does swing dramatically. This is likely due to the huge amount of available labor in March.

This will allow the Fed for further easing in monetary policy without a rise in core inflation."

T.J. MARTA, FIXED INCOME STRATEGIST, ROYAL BANK OF CANADA CAPITAL MARKETS, NEW YORK:

"That's a very poor number, with not only a downward surprise in March but downward revisions to the prior numbers.

"If you look at initial claims, continuing claims and non-farm payrolls, they are all pointing to similar levels we had at the beginning of or during the 2001 recession. It is hard to say we are not in recession.

"The price action was a kneejerk reaction lower in Treasury yields."

RICHARD YAMARONE, CHIEF ECONOMIST, ARGUS RESEARCH, NEW YORK:

"It's not pretty, but then again, it's not consistent with a steep drop off in economic activity either. Recessions are accompanied by steep, 200,000 to 300,000 loss numbers. If a recession does ensue, it would more likely be a shallow and shortened nature. This was the biggest drop since March 2003, and we never had a recession after that. The 5.1 percent unemployment rate is low by historical standards, but it's not good news in the current environment."

AL GOLDMAN, CHIEF MARKET STRATEGIST, WACHOVIA SECURITIES, ST. LOUIS:

"It was disappointing because investors have been hoping that there would be some evidence that maybe the economy was starting to stabilize.