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.