Weak Jobs Report Reinforces Recession Fears
Kurt Brouwer March 7th, 2008
More bad news on the economy today as the employer payroll report from the Labor Department was released showing another decline in business employment:
U.S. Economy: February Payrolls Unexpectedly Decline (Bloomberg, March 7, 2008, Shobhana Chandra)
“Employers unexpectedly cut jobs in February for the second consecutive month, adding to evidence the U.S. is in a recession that may dominate the economic debate in this year’s presidential campaign.
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.”…
This is more evidence that the economy is contracting and it definitely makes an official recession far more likely. There were a couple of unexpected elements in the report.
First, the unemployment rate actually dropped slightly to 4.8%. This is due to people leaving the rolls of those seeking jobs. However, there is also some evidence that we are seeing a population decline in addition to a labor force decline. Second, the report indicated that the average hourly rate actually went up slightly. We’ll see if that trend continues.
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Did you enjoy this article?
Kurt, it sounds as if you’ve become more bearish on the economy these past few days. If so, what was this prompted by?
The weak jobs report.