PoliGazette » Biggest Job Decline in Five Years

Biggest Job Decline in Five Years

Filed under: Economy, United States — Michael van der Galien, Editor-in-Chief on March 7, 2008 @ 5:15 pm CET

U.S. employers cut payrolls for a second straight month during February, slashing 63,000 jobs for the biggest monthly job decline in nearly five years as the labor market weakened steadily, a government report on Friday showed. It’s becoming increasingly clear that the next US President will inherit an economy that’s not as strong as it once was. Of course, the American economy is diverse and able to get itself up when it’s slammed down, but still.

The Labor Department said last month’s cut in jobs followed an upwardly revised loss of 22,000 jobs in January instead of 17,000 reported a month ago. In addition, it said that only 41,000 jobs were created in December, half the 82,000 originally reported.

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.

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.

Now, 4.9% is still awesome, but it’s going up and that’s seldom a good sign. It’s going downhill and looking at the other indicators one gets the impression that rock bottom hasn’t been hit. Yet.

As for what areas were hit hardest, it seems that the suffering was quite 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.”

Interestingly enough, Reuters points out that “the government added 38,000 jobs in February on top of 4,000 new-hires in January.” Very conservative indeed. Since that’s distinctly unconservative, Reuters calls it a “bright spot.”

I think that most people who believe that the government is big enough as it is would slightly disagree.

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