More Bad Economy News: Employers Cut Most Workers Since 2003
April 4th, 2008 by JOE GANDELMAN, Editor-In-Chief
Here’s yet another bit of bad economic news about an economy President George Bush insists is still really robust, just slowed down and — bite your tongue — certainly NOT in a recession:
Employers in the U.S. cut the most workers in five years last month, signaling that the economic contraction is deepening and that the Federal Reserve will continue to lower interest rates.
Payrolls shrank by 80,000, more than forecast and the third monthly decline, the Labor Department said today in Washington. The jobless rate rose to 5.1 percent, the highest level since September 2005, from 4.8 percent.
“This is the final blow,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “It’s clear the U.S. economy is in a recession. That’s going to shake the confidence of investors and companies across the world and cause people to curtail spending in other countries.”
This isn’t quite Bush’s interpretation (things look different from the White House when you have chef-cooked meals, government insurance and lots of friends who are CEOs and millionaires). He has insisted it isn’t a recession — merely a “slowdown.”
Declining employment is the latest billboard-size signal that the American economy is either in or close to a recession. Falling housing prices, trouble in the credit markets, and worried consumers make growth unlikely to maintain any momentum through the first half of 2008.
Also, a move above 5 percent in the jobless rate is the first step above the rate many economists consider “full” employment. While the rate is still low by historical standards, this sort of increase in joblessness removes some of the last supports for lingering hopes that the economy will reverse course quickly.
Jobs in the private sector have now been declining for four straight months. Hopes that losses would remain in some of the most vulnerable sectors like manufacturing or housing now appear too optimistic. Losses have spread to temporary jobs and the retail sector, as well as financial firms still in turmoil after the near failure of Bear Stearns, where an estimated 7,000 layoffs still loom.
Look for the White House to eventually but belatedly use the “r” word.
In 2002, when the economy started to sour, Bush and Cheney had an explanation for the economy’s sag: it was all Bill Clinton’s fault:
Although last week’s revision of U.S. gross domestic product data for 2001 may have been old news for the economy, it was something of a stroke of luck for President Bush, who has since used it as evidence that he inherited an economic mess when he took office.
Bush and Vice President Dick Cheney, in separate speeches Wednesday, both claimed the U.S. economy was already in recession when they were inaugurated in January 2001, implying the blame for the slowdown rested on President Clinton’s shoulders.
Both men also made assurances that they had a handle on the problems facing the economy.
“When I took office, our economy was beginning a recession,” Bush said in a speech at a Mississippi high school. “Then our economy was hit by terrorists. Then our economy was hit by corporate scandals. But I’m certain of this: We won’t let fear undermine our economy and we’re not going to let fraud undermine it either.”
Will this recession be painted as the Democratic Congress recession as we move closer towards Election Day? Place your bets and set your radios to hear Rush Limbaugh and Sean Hannity now……….
This entry was posted on Friday, April 4th, 2008 at 2:24 pm and is filed under Corporations, Bush Administration, Wall Street, George W. Bush, Economy, Politics, 2008 Elections, Business. Both comments and pings are currently closed.
