Skip to comments.Payrolls Plunge by 63,000, Biggest Drop in Five Years
Posted on 03/07/2008 6:38:10 AM PST by Lazamataz
U.S. employers cut payrolls for a second straight month during February, slashing 63,000 jobs for the biggest monthly decline in nearly five years as the nation's labor markets weakened steadily, a government report on Friday showed.
The Labor Department said last month's cut followed an upwardly revised loss of 22,000 jobs in January rather than the 17,000 reported a month ago. It also said only 41,000 jobs were created in December, half the 82,000 originally reported.
"This confirms the fears that have been lurking in the financial markets in recent weeks. The probability of a U.S. recession is at more than 50 percent," said Richard DeKaser, chief economist for National City Corp. in Cleveland.
"The Fed has to be more aggressive," DeKaser added. The U.S. central bank is expected to cut interest rates again later this month and, on Friday just before the payrolls report became public, announced new measures to add liquidity to severely strained credit markets that are near seizing up.
U.S. Treasury debt prices shot up in anticipation that the Fed will cut interest rates while stock futures weakened sharply. The dollar's value was at a record low against the euro after the unfavorable employment report was issued.
The back-to-back January and February job losses were the first consecutive monthly declines since May and June of 2003.
The February jobs report was more bleak than expected. Economists surveyed by Reuters forecast 25,000 jobs would be added to payrolls last month. They had forecast that the unemployment rate would edge up to 5.0 percent.
Department officials said February's job losses were the largest for any month since March 2003, when 212,000 jobs were cut.
During February, the national unemployment rate eased to 4.8 percent from 4.9 percent in January, but that was because fewer people were in the labor force. The department said the number of people in the workforce fell by 450,000 in February.
Job losses were widespread. Some 52,000 jobs were lost in the manufacturing industries, the largest decline since July 2003 when 92,000 jobs were cut. Construction businesses eliminated another 39,000 jobs on top of 25,000 that were cut in January, a reflection of the housing industry's deepening woes.
The department said that since the housing boom peaked in September 2006, construction businesses have cut 331,000 jobs.
Retail industries also shed jobs last month, dropping 34,000 people off their payrolls, a possible reflection of concern from businesses that hard-pressed consumers are likely to begin pulling back sharply on spending.
In a statement issued with the monthly jobs data, the commissioner of the Labor department's bureau of labor statistics, Keith Hall, warned that many of this year's job losses may take a long time to come back.
"The increase in unemployment over the past 12 months was concentrated among persons who lost jobs and had no expectation of being recalled," Hall said in remarks prepared for delivery to Congress' Joint Economic Committee.
One bright spot was that the government added 38,000 jobs in February on top of 4,000 new-hires in January. Education and health services businesses added 30,000 new hires in February on top of 49,000 in January.
Unemployement falls to 4.8%.
The DNC media busy trying to get a socialist elected in the fall.
Just an instant reply of 2004 or 1992 or 1984 non stop drip, drip ,drip of bad news by the media division of the DNC .
Let me be the first: It’s Bush’s fault.
Follow up from the Wall Street Journal
>>Jobs Data Slam Stocks; Recession Fears Mount
A Wall Street Journal Online NEWS ROUNDUP
Stocks stumbled after a startlingly weak employment report presented the starkest sign yet that the U.S. is heading toward recession or in one already.
Just after the opening bell, the Dow Jones Industrial Average was down 78.23 points, or 0.7%, at 11962.16. The Standard & Poor’s 500 was down 0.6%, or 8.37 points, at 1295.97. The Nasdaq Composite Index was down 0.6%, or 12.43 points, at 2208.07.<<
“One bright spot was that the government added 38,000 jobs in February on top of 4,000 new-hires in January.”
Now there’s a bright spot!
Are they counting the jobs left vacant when the illegals were rounded up and sent back recently?
I remember when 5% was considered full employment. Why don't they ever mention that these numbers do not take the self employed into account? Many of us are dropping out of the "workforce" by retiring, semi retiring, or starting small businesses.
Shhhhhhhhhhhhh! It's a secret.
Gen-X and all the other youngsters are going to have it made, starting in a few years. As the Boomers start to retire, millions of jobs will open up.
Trouble is, taxes will go up to make up for the SS deficit.
I think I have made the correct strategic decision, though. I'm focusing on tax, rather than accounting. Tax compliance is a necessary evil that is not likely to be outsourced, or cut during lean times.
I've told all of my kids to stay out of accounting. With increased computerization, artificial intelligence, and outsourcing (due to the repetitive nature of accounting transactions), accounting is no longer the stable career that many perceive it to be (including my better half!).
Hmmmm. I must be doing something wrong. I just got a big promotion and a big, fat raise, and we all got the green light from Corporate to hire on two more full-time people and as many seasonal workers as we need.
We’ll be adding at least a dozen (above minimum wage) jobs to the local market, in the completely fiscally mis-managed, over-taxed, socialist, BLUE state of Wisconsin.
But...what the hell do I know? I’m just here “on the ground” doing my job and creating wealth and opportunity for others. *SHRUG* ;)
A lower unemployment rate doesn’t contradict the negativity of the headline job loss.
It means that the active workforce (those working and those looking for jobs) is shrinking even faster than the number of jobs.
Most importantly, the decline of those who are working is an absolute ill regardless of how many people aren’t working, because only work is economic productivity.
Secondly, given that the population isn’t declining, a drop in the active workforce is very troubling.
Most people who aren’t working or looking for work are, or are planning to, transfer the cost of their sustenance to the public (via social security and Medicare, disability and other forms of deeply subsidized if notionally “earned” assistance, welfare and other forms of wholly-unearned public assistance, subsidized student loans and tuition, and, of course, crime), while much of the rest start to consume their savings (consumption being less economically beneficial than investment, in most cases).
You suck. Get with the program.
And the program is......
At the end of Carter’s term, unemployment hit 10 percent. Are we there yet? Does anyone remember what it was during Clinton’s second year, before the Republican Congress bailed him out? Wasn’t it up near 6 percent?
You also suck.
Things are horrible, and we're gonna all live in caves and eat sticks.
If we're lucky enough to even live.
As I recall, when Clinton had unemployment at 6%, the media was ecstatic! The man was a genius! 6% was practically full employment! Why, I remember when Jimmy Carter had it at 10%! Clinton was The Man!!
Of course, now it's at 4.8%, and as Laz will tell you -- WE'RE ALL GONNA DIE!
Just over one full year for the DEMOCRAT HOUSE & SENATE and look at what we have.......time to pull the purple shroud and drink the kool aid
Don't make me give my "U4-U6 vs U3" lecture again.
A lot of lost hands on basic accounting knowledge in our future.
OK so now accounting, IT and manufacturing is something we tell our kids not to pursue due to globalism.
First I've heard of it.
I have to admit being confused by this information. Why is unemployment still so low?
What is never mentioned in these doomist reports (even thought the unemployment rate dropped) is the numbers from the household survey which in not figured into the unemployment rate. Obviously every month more and more people are turning to the internet for jobs. The numbers are rarely mentioned in the media. I’m still trying to figure out why the drop from 4.9 to 4.8 is insignificant because fewer people are in the work force. Of course when the rate goes up do they mention fewer people are in the workforce?
Well, seriously, we are slowing somewhat. It remains to be seen if it is a Big Slowdown or a smaller one. Employers report shutting down jobs, therefore the numbers, but people seem to be getting by, by starting little one-man firms, or entering a ‘grey’ economy — an economy where the numbers are not so easy to measure. Also, many people have very large capital reserves, and can continue to spend and live on that money — and in some cases, that amount of money will hold them up for YEARS of zero employment.
Because that would destroy the argument propagated by Big Media for the benefit of the Democrat Party that people have no jobs. The true unemployment rate (people not working for any renumeration) is probably under four percent with the internet and people like you starting their own businesses. Remember when the Republican Party is in the White House, America must be made to look like the Great Depression is still in full force.
That's about the size of it.
My two kids in college have lived through what dear old dad has encountered: the average shelf life of a Controller/CFO is now 18-24 months, while the average tenure of two corporate tax departments that I temp'ed at recently is upwards of 15 years.
Due to the continued and increasing complexity of the tax code, it is not likely that these jobs will be outsourced. That's the reason why I'm turning my focus in that direction. Thankfully, I start a new position in 10 days, in a newly established tax department in a multinational company.
I'd be willing to bet that KPMG didn't fare well when they outsourced individual tax return prep to India.
As for my own kids, my daughter is majoring in Hospitality Management (her dream is to have her own sports bar), and my 18 year old son has no clue what he wants to do, other than become an expert at Guitar Hero.
Before I close, do you agree with my assessment of accounting as a future career, colleen? It's still a decent career, but being a CPA doesn't have nearly the cache as it did 10-15 years ago.
My son-in-law was hired the same day he was interviewed as a computer expert in La Crosse. His growing firm is now seeking to expand dramatically. They actually told him to contact anyone he knew with computer expertise to come in for an interview. I believe the unemployment rate in the area is under four percent which is just a little less than the Wisconsin ue rate. Things are sure horrible. (smirk)
When people complain about how horrible things are, I use a simple guide to determine how well Americans are living. I look at the size of their stomachs. From travelling around the country the last six years I would say Americans are still living pretty good. Especially here in Wisconsin where there appears not to have been much stomach shrinkage in the last few years despite THIS HORRIBLE ECONOMY WHERE WE’RE ALL GOING TO DIE!!! Arrrrrrggggggghhh!!
If we had one of the so called "round ups", we could lose 10 million jobs and the unemployment rate wouldn't be affected. In fact, it could decrease because the jobs would have to be filled by Americans on unemployment. Most workers drawing unemployment, however, probably don't want to make beds or wash dishes. The main impact would be the carpenters and bricklayers would get off unemployment and be paid a living wage. Unless High School students get alot more humble, we may have trouble filling the bed makers and dish washer jobs for less than $10 an hour.
'Back in the day' being an accounting major, being in the top 10% of your class, you could pick your firm - they were all after the same students. Being a CPA was kind of like being an FBI agent, so yes, you're right, it did have cache!
I guess all this works for now but I do worry about lost knowledge in the future. There will be a gap - not so many who have worked their way up from mailroom to CEO. I think those days are over.
Thinking longterm, I don't think 'the world is flat' mentality is good for the USA.
My daughter is a nursing major and my son is like your son - kind of clueless at 14. We'd be happy if he showed some handiness - always room for a good plumber or electrician. All I know is he has to have a college education because that's requisite - and hopefully something will jump out at him.
We have a friend who owns a sheetrock business - he learned as a kid when his father started up the business and then he and his brother took it over when the dad died. He hires Americans - pays them $15 to $20 an hour (not get rich money as we live in Ma) but lately he cannot keep up with other sheetrock companies as they are hiring either illegals or new immigrants and paying them $5 - $8 per hour.
I don't know what all this means but globalism definitely has 'moved our cheese' and you can no longer assume you'll be able to make a living at doing sort of the same thing for most of your life - and continuing ed is something that is important (sort of hard to save for lifelong education and save for the kids education as well). OK for chiefs I guess, but the Indians are sure gonna suffer.
Good luck in your new job!
JOB SUCKING SOUND SOUND SOUND
Lots of US companies do that -- also, lots of companies lay off but then hire H1Bs - no job loss and in fact, they sometimes lay of 1 US worker and hire a couple of H1Bs - so no job loss and actually, an increase in hiring --- how is that measured?
When do you refuse to buy gas or what luxury to you cut first. A good example is Harley Davidson. They were flying high till things started to tighten. The first thing to go in bad times is a $25k motorcycle. They have fallen from $60+ to $35 in just a few months. We will still buy bread, even for $4 a loaf, but we will look to cut everything else first. When the consumer goes, the economy goes.
Keep your eyes on the plates.
I have to disagree. I worked for 8 years in public practice and now work in industry. Competent accounting personnel are few and far between. Most of the “grunt work” has indeed been automated, but the need for people who can think and apply accounting principles to real world situations is very real. As standards get more and more complex, this will only become more and more of an issue. This combined with SOX and increasing importance put on accounting and controls in general tells me there is a great future for bright young people to go into accounting.
I guess my question is, ok, the grunt work is gone but to get to the point where you can apply accounting situations in the real world, don't you have to start out with the grunt work -- I recall these kids going out to firms and doing paper and pencil auditing/accounting work (grunt work) just so they could progress to the point where they could apply what they learned in school to the real world. Where do you get that experience now?
SOX... kill me... I'm in IT (for a little while longer anyhow!).
I think the ticket is specialization and knowing that you will be going to school off and on for the rest of your working days.
If a company sends it to India, the job is closed here, but the fired guy is counted as unemployed. The rate goes up. Your jobless people will be counted and make a difference even though it's over a 10 state area. The H1B’s,....you got me, I don't know. I can't figure we would import a worker, and then count him as unemployed if he is hired or fired. If we import an H1B, and then his job moves, is he allowed to draw unemployment, or is he sent home? The job he took was here before, but we just hired outside the US pool. I'm just not sure about that one.
I've also grown weary of being told how "overqualified" I am. Sometimes, you can't win for losing.
In my own case, my job hasn't been outsourced, it's been offshored (feels the same though) -- meaning, the company has redistributed its workforce - the world is flat. I could relocate to India and work at my job there, but... A lot more companies are going that route and cutting out the middleman (WiPro, Accenture, Tata, Infosys, etc).
The company has actually added to its payroll (hired 2 Indians for 1 American) although the jobs aren't actually in the USA.
my understanding is that if an H1B worker loses their job they have to leave the country, I think they can stay if they find another job but they have a limited time to do it, something like 90 days.
The reason I'm so exercised about illegals is coming to the top right now. We have convinced ourselves that they are an asset, but they drain our resources and depress our pay. I recently complained about illegals being able to get bank loans, including house loans. I was immediately pooh poohed and told they couldn't possibly hurt anything by getting a loan. Now we are seeing the effect. A larger proportion of abandoned homes are illegals that lost jobs and went to Mexico, than ever before. We loaned money to illegals with no documentation, and then act surprised when they walk away. Where are the worst offenders? California, Nevada, Arizona, and Florida. Right now, the honcho's at Citigroup are in front of congress explaining their role in the sub prime mess. One,(Prince), bragged about how they had been working with La Raza to get more homeowners in their "communities". That community apparently has been "hard" hit.
I'm not saying they are totally responsible for the housing problem, but their contribution IS substantial. Many illegals are taking good jobs and depressing the wages of Americans. The TV always seems to show pictures of fruit pickers when talking about illegals, but the reality is that are taking good jobs and depressing our economy. They put their children in our schools, fill our jails, and emergency rooms and pay little or no taxes. If and when housing turns back up, the jobs will be filled with Americans if illegals are sent home and KEPT home. Then you will see higher wages, more jobs counted, and the figures will make more sense. Right now, a home builder can release 20,000 jobs and there is almost no impact on unemployment other than the stores that sell products to them.
Labor force status:
Type of data:
LNS12300000 Seasonal Adjusted
Interesting article on H1Bs from Businessweek and just published today. There's a link to the top 200 American companies who use H1Bs.
"Many U.S. workers oppose any expansion of the program. They say H-1Bs let companies hire cheap workers from abroad, rather than Americans. They say the timing for expansion couldn't be worse, with the economy faltering. "Foreign workers are coming into the U.S., even though Americans need jobs," says Kim Berry, president of the worker advocacy group Programmers Guild. "It turns the intent of the H-1B program upside down"
Or you could look at it another way, gym memberships cost money.
Well, if we’re all gonna die, can I at least choose the Leftists I take down with me?
Man, that would be sweet, LOL!