Economy Lost 63,000 Jobs in February
The economy shed 63,000 jobs in February, the government said on Friday, the fastest falloff in five years and the strongest evidence yet that the nation is headed toward — or may already be in — a recession.
Manufacturers and construction companies, reeling from the worst housing slump in decades, led the declines in payrolls. But the losses were spread across a broad range of businesses — including department stores, offices and retail outlets — putting increased pressure on consumers’ pocketbooks.
The unexpected decline raised anticipation on Wall Street that the Federal Reserve will lower interest rates again later this month, perhaps by as much as a full percentage point, as the central bank scrambles to stave off a steep economic slowdown.
“I haven’t seen a job report this recessionary since the last recession,” said Jared Bernstein, an economist at the Economic Policy Institute in Washington. “This is a picture of a labor market becoming clearly infected by the contagion from the rest of the economy.”
. . . The private sector lost 101,000 jobs last month, the biggest dropoff in five years. Retail stores shed 34,000 jobs, while the manufacturing sector lost 52,000 workers and construction firm payrolls shrank by 39,000 jobs.
The loss in February was the second consecutive monthly decline in the labor market; economists had predicted a slight increase. The government also revised down its estimate for January to a loss of 22,000 jobs — the first decline in four years — and cut in half its estimate for job growth in December.
“One month you can dismiss,” said Ethan Harris, chief United States economist at Lehman Brothers. “Two months is a lot harder.”
In an interview, Mr. Harris sounded discouraged, a feeling shared by the growing number of Americans who are out of a job. Fewer Americans looked for work in February, and the size of the nation’s overall labor force declined.
Those developments sent the unemployment rate down to 4.8 percent last month from 4.9 percent in January. “Had the 450,000 people who left the labor force last month been counted among the unemployed, the jobless rate would have been 5.1 percent instead of 4.8 percent,” said Mr. Bernstein of the Economic Policy Institute.
Ah yes, the first signs of economic panic and it comes from the Fed itself. “The Fed will increase the amount available to $100 billion a month and either continue or increase that pace in the months ahead.” Our panicked chairman, Ben Bernanke, is ready willing and able to print $100 billion a month–over $1 trillion in the lead-up to the November election, just to keep the lid on the Bush Fade to Black.
Fed policy (someone should remind Mr. Bernanke) is designed (and expected) to prevent inflation and protect the world value of the dollar. Printing money is inflationary. Printing a trillion a year is hyper-inflationary. Cutting the anticipated 1% from the current interest rate (already well below a less-panicked Europe) will hardly encourage an already terrified horse from leaving a burning barn.
These Wall Street insiders are trying to prevent market collapse. A properly functioning stock market is supposed to collapse when it has been subjected to the fraud and greed of the past four decades. It is merely following an absolutely predictable course. Given the choice between fixing the problem and fixing up their friends, Bernanke and Paulson have chosen in their own best interests, rather than those of the country.
Another percent off the interest rate will likely destroy a dollar already on life-support.
The reasons for leaving Iraq to the Iraqis are many, but they are now well beyond the apparent military paralysis. We desperately need to shut down the Iraqi money-pump in order to re-direct the flow to the American job market.
What jobs cannot be exported to China or India?
Construction jobs, rebuilding a seriously depreciated infrastructure. Those are engineering and truck-driving jobs that support technical as well as blue-collar payrolls, jobs that can put millions of Americans to work at good wages.
Hillary and Barack and John go to Michigan and Ohio and lament the job losses in those key midwestern states–but they have no programs for mending the broken structure. Getting rid of the tax code, raising the minimum wage, rebuilding America are all ideas that should be circulating within the campaign rhetoric–and aren’t.
National health care is important and must be solved, but health care doesn’t mean much if you’re still working at $5.85 an hour and even that job is at risk.
While we debate whether or not the nation is ‘approaching’ recession, we peer over the edge of the abyss at ’29 style depression–the word no one will utter. “Facts do not cease to exist because they are ignored,” writes Aldous Huxley and he has not yet been disproved.
Bernanke nd the administration are dead wrong about what they are dealing with and how they choose to deal with it. In 242 days, we will go to the polls, put out trust in Diebold and press the screen.
The very least the candidates might do for us is give a clue about how they propose to either prevent or deal with the coming financial collapse.