651,000 Jobs Reported Lost in February
New York Times
By JACK HEALY
Published: March 6, 2009
Published: March 6, 2009
Another 651,000 jobs were lost in February, adding to the millions of people who have been thrown out of work as the economic downturn deepens.
In a stark measure of the recession’s toll, the Bureau of Labor Statistics reported on Friday that the national unemployment rate surged to 8.1 percent last month, its highest in 25 years.
The economy has now shed more than 4.4 million jobs since the recession started in December 2007, and economists expect that the losses will continue over the rest of the year and into 2010. The economy lost an upwardly revised 655,000 jobs in January, when the unemployment rate rose to 7.6 percent. December job loss was revised to 681,000, from 577,000.
Some economists expect that the nation’s businesses could cut another two million jobs and that unemployment could reach 9 to 10 percent by the time a recovery begins.
“It just feels like we’re in the teeth of the recession, and the bite is still very hard,” said Stuart Hoffman, chief economist at PNC Financial. “This is economy-wide, industry-wide. It just shows the severity and the breadth of the job losses.”
The figures were about equal to economists’ predictions of 650,000 jobs lost in February, but the unemployment rate rose higher than an anticipated 7.9 percent.
February marked the fourth consecutive month that the economy has shed more than 500,000 jobs, a pace that underscores the magnitude of the problems facing the Obama administration as it promises to save or create 3.5 million jobs over the next two years.
Last month, President Obama signed a $787 billion stimulus package of tax cuts, infrastructure spending and emergency aid. The first tax credits, in the form of reduced payroll withholdings, are expected to appear on paychecks beginning April 1.
But in testimony this week before Congress, federal officials again cautioned Americans that even with the stimulus package, a recovery will take time.
The package “should provide a boost to demand and production over the next two years as well as mitigate the overall loss of employment and income,” the Federal Reserve chairman, Ben S. Bernanke, told the Senate Budget Committee, but the timing is “subject to considerable uncertainty.”
The pace of job losses has only increased since the credit crisis shook financial markets last autumn, spawning a vicious circle of economic contraction that dragged down corporate earnings, consumer spending and overall growth. And Mr. Bernanke said in testimony this week that the labor market “may have worsened further in recent weeks.”
Economists worry that mounting job losses could make it harder for homeowners to make their mortgage payments, triggering another wave of home foreclosures, which would further depress home values and the mortgage-related securities owned by major banks.
“We’re feeling the negative fallout from the intensification of the financial crisis,” Mickey Levy, chief economist at Bank of America, said. “We’re in the middle of the worst stage of job losses as well as the speed of contraction of gross domestic product.”
Workers from New York to Florida, from the Rust Belt to the Sun Belt, and across nearly every sector of the economy are being affected as employers reduce costs by slashing their payrolls and cutting their capital investment. Manufacturers cut a seasonally adjusted 168,000 jobs in February, and 104,000 construction jobs were lost. And retailers cut 39,500 jobs.
“There’s been no place to hide,” Mr. Hoffman said. “Everybody in every industry has lost jobs or is feeling insecure about whether they’re going to keep their jobs or how their company’s going to do.”
In the New York region, the Federal Reserve’s beige book noted earlier this week, that hiring “has virtually ground to a halt since the beginning of the year, during what is usually a busy season,” the beige book said, with large financial firms having “all but stopped hiring.”
“Both manufacturing and non-manufacturing firms in the district report increasingly widespread cutbacks in their employment levels in February,” the report said of New York, “and a sizable proportion expect further retrenchment in the next six months.”
Mark Ortiz was one of those who joined the ranks of the unemployed in February. Mr. Ortiz lost his job at the art-framing company where he had worked for 11 years, most recently as the production manager. He has plastered his résumé across the Internet and searches for jobs every day from his home on Long Island, New York. His search has been hampered by the fact that he went straight to work when he was younger, and never got a college degree.
“That was a major strike against me,” he said. “You spend all this time doing this, and now what? It’s almost like I’ve gotten divorced and I’ve got to find a new wife.”
In a stark measure of the recession’s toll, the Bureau of Labor Statistics reported on Friday that the national unemployment rate surged to 8.1 percent last month, its highest in 25 years.
The economy has now shed more than 4.4 million jobs since the recession started in December 2007, and economists expect that the losses will continue over the rest of the year and into 2010. The economy lost an upwardly revised 655,000 jobs in January, when the unemployment rate rose to 7.6 percent. December job loss was revised to 681,000, from 577,000.
Some economists expect that the nation’s businesses could cut another two million jobs and that unemployment could reach 9 to 10 percent by the time a recovery begins.
“It just feels like we’re in the teeth of the recession, and the bite is still very hard,” said Stuart Hoffman, chief economist at PNC Financial. “This is economy-wide, industry-wide. It just shows the severity and the breadth of the job losses.”
The figures were about equal to economists’ predictions of 650,000 jobs lost in February, but the unemployment rate rose higher than an anticipated 7.9 percent.
February marked the fourth consecutive month that the economy has shed more than 500,000 jobs, a pace that underscores the magnitude of the problems facing the Obama administration as it promises to save or create 3.5 million jobs over the next two years.
Last month, President Obama signed a $787 billion stimulus package of tax cuts, infrastructure spending and emergency aid. The first tax credits, in the form of reduced payroll withholdings, are expected to appear on paychecks beginning April 1.
But in testimony this week before Congress, federal officials again cautioned Americans that even with the stimulus package, a recovery will take time.
The package “should provide a boost to demand and production over the next two years as well as mitigate the overall loss of employment and income,” the Federal Reserve chairman, Ben S. Bernanke, told the Senate Budget Committee, but the timing is “subject to considerable uncertainty.”
The pace of job losses has only increased since the credit crisis shook financial markets last autumn, spawning a vicious circle of economic contraction that dragged down corporate earnings, consumer spending and overall growth. And Mr. Bernanke said in testimony this week that the labor market “may have worsened further in recent weeks.”
Economists worry that mounting job losses could make it harder for homeowners to make their mortgage payments, triggering another wave of home foreclosures, which would further depress home values and the mortgage-related securities owned by major banks.
“We’re feeling the negative fallout from the intensification of the financial crisis,” Mickey Levy, chief economist at Bank of America, said. “We’re in the middle of the worst stage of job losses as well as the speed of contraction of gross domestic product.”
Workers from New York to Florida, from the Rust Belt to the Sun Belt, and across nearly every sector of the economy are being affected as employers reduce costs by slashing their payrolls and cutting their capital investment. Manufacturers cut a seasonally adjusted 168,000 jobs in February, and 104,000 construction jobs were lost. And retailers cut 39,500 jobs.
“There’s been no place to hide,” Mr. Hoffman said. “Everybody in every industry has lost jobs or is feeling insecure about whether they’re going to keep their jobs or how their company’s going to do.”
In the New York region, the Federal Reserve’s beige book noted earlier this week, that hiring “has virtually ground to a halt since the beginning of the year, during what is usually a busy season,” the beige book said, with large financial firms having “all but stopped hiring.”
“Both manufacturing and non-manufacturing firms in the district report increasingly widespread cutbacks in their employment levels in February,” the report said of New York, “and a sizable proportion expect further retrenchment in the next six months.”
Mark Ortiz was one of those who joined the ranks of the unemployed in February. Mr. Ortiz lost his job at the art-framing company where he had worked for 11 years, most recently as the production manager. He has plastered his résumé across the Internet and searches for jobs every day from his home on Long Island, New York. His search has been hampered by the fact that he went straight to work when he was younger, and never got a college degree.
“That was a major strike against me,” he said. “You spend all this time doing this, and now what? It’s almost like I’ve gotten divorced and I’ve got to find a new wife.”
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