U.S. Unexpectedly Loses Jobs In February
More signs that the economy is worsening and that despite President George Bush’s insisting that it just ain’t so, the U.S. is in a recession:
The U.S. unexpectedly lost jobs in February for the second consecutive month, adding to evidence the economy is in a recession.
Payrolls fell by 63,000, the most in five years, after a revised decline of 22,000 in January, the Labor Department said today in Washington. The jobless rate dropped to 4.8 percent, reflecting a shrinking labor force as some people gave up looking for work.
“All the lights are flashing red,” said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts, in an interview with Bloomberg Television. “We’re in a recession. I don’t think there is any doubt about it at this point.”
Treasury notes soared after the report on concern that the weakening labor market, combined with lower home prices, higher fuel bills and a global credit squeeze, will force consumers to further reduce spending. Minutes before the figures were released, the Federal Reserve said it will expand two short-term auctions this month to $100 billion in an effort to address a deepening credit crisis.
Traders now anticipate Fed Chairman Ben S. Bernanke and his team will cut the benchmark interest rate by at least three quarters of a percentage point at or before their March 18 meeting.
Here in California, there a tons of signs that this isn’t just an economic downturn but one of the worst recessions yet. A few:
–The city of Vallejo is on the brink of declaring bankruptcy.
–Teachers in some schools have been told they will likely be getting news of layoffs in the mail.
–Newly constructed office space, new condos and condo conversions in many parts of the city are vacant. One strip mall that used to be filled now has three vacancies.
–I know of one business that was supposed to be sold so the land could be used for a condo complex. Employees tell me it is now unlikely to go thru due to the market and tighter financing.
–A business franchise owner shut down one of his businesses and moved in with his partner in his to adapt to decreasing business at his store.
–On a personal note, the local entertainment business here was shockingly down after the October Southern California fires and now it is down ever more due to the national and California economic meltdowns. One agent took 2 months to pay an entertainer $160.
Bush has a different interpretation of what’s going on:
US President George W. Bush denied Tuesday that the US economy was in recession or would go into one despite a spate of downcast reports and gloomy indicators.
“We’re not in a recession, I don’t think we will go in a recession. We’re in a slowdown, and there’s a difference,” Bush said in an interview with American Urban Radio Networks. “No question there is softening now.”
The US president boasted of job growth since he took office in January 2001 but acknowledged that “economies go through cycles, and the question is how do you deal with the down-cycle.”