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651,000 jobs lost as US hits 25 yr jobless high

651,000 jobs lost as US hits 25 yr jobless high
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First Published: Fri, Mar 06 2009. 08 30 PM IST
Updated: Fri, Mar 06 2009. 08 30 PM IST
Washington: The US economic bleeding extended in February with 651,000 jobs lost and the unemployment rate surging to 8.1 %, according to data Friday highlighting an ever-deepening recession.
The number of job losses was in line with most forecasts but underscored the dire state of the economy as companies axe jobs to cope with an intensifying slump.
The Labor Department also revised heavily upward its estimates for losses for the previous two months -- 655,000 in January from 598,000, and 681,000 in December from 577,000. The figures showed December’s losses as the worst on record since October 1949, officials said.
The jobless rate rose from 7.6% in January to 8.1% in February, the highest since December 1983.
“It was an awful report but it was not a death spiral report,” said Cary Leahey, senior economist at Decision Economics, who said some were bracing for losses of up to one million jobs.
“While things are terrible we are tracking the 1981-82 recession very closely.”
Leahey added that with tax cuts and various financial rescues taking hold, “I don’t see why the economy can’t bottom in the next three to six months.”
Robert Brusca at FAO Economics said the report suggested the worst job losses are past: “The revisions have made the trend looking ahead much less bad.”
Officials said 4.4 million jobs have been lost since the recession began in December 2007, with 2.6 million in the past four months.
Sophia Koropeckyj at Economy.com said that the latest report was “disastrous,” pointing to a three-month decline in payroll employment of nearly two million.
“Such a plunge was last seen in the mid-1940s, when wartime production was winding down,” she said.
The goods-producing sector shed 276,000 jobs in February while services lost 375,000. Within the goods-producing sector, manufacturing lost 168,000 jobs.
Among the few sectors showing modest job gains were education and government.
The number of persons who worked part-time for economic reasons in February -- sometimes referred to as involuntary part-time workers -- rose by 787,000, reaching 8.6 million. This includes people who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs.
The jobs report underscores the challenges facing President Barack Obama’s administration in stabilizing a teetering financial system and pulling the shrinking economy out of a second year of recession.
Based on the most recent government estimate, the US economy contracted at an eye-popping 6.2% pace in the fourth quarter of 2008, and some analysts say the downturn may be even worse in the first quarter of 2009.
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First Published: Fri, Mar 06 2009. 08 30 PM IST