Glory
March 8th, 2008, 12:11 PM
http://www.washingtontimes.com/apps/pbcs.dll/article?AID=/20080308/BUSINESS/527128961/1001
A jobs report yesterday showed that employers nationwide slashed 85,000 jobs since the beginning of the year, in the clearest sign yet that the economy has entered or is verging on recession.
The news changed the political discourse, with President Bush urging confidence even as the White House acknowledged for the first time that the economy may be contracting rather than growing.
Bush's top economic adviser, Edward Lazear, acknowledged yesterday that the economy may dip into negative territory in the current quarter, according to the Associated Press. Mr. Lazear's comment was the most pessimistic assessment heard out of the administration. He would not discuss whether the White House believes the economy will actually fall into a recession, AP reported.
Cutbacks in nearly every industry caused people to drop out of the work force, sent consumer confidence plummeting and prompted the Federal Reserve to pump another $200 billion into credit markets to try to revive growth.
The job losses were heaviest in housing construction and manufacturing, where the cumulative effects of a two-year recession in housing have hit hardest. But retailers also cut 34,000 positions as consumers grew gun-shy about spending last month, and the weakness spread to one of the sturdiest sectors — professional and business services — which lost 20,000 jobs.
Health care, restaurants and state and local education were among the only sectors to post employment growth, according to the Labor Department report.
The dismal job outlook prompted nearly 500,000 people since December to give up looking for a job, drawing down the unemployment rate to 4.8 percent from 5 percent.
Economists said the two-month net loss of 85,000 jobs meets one of the most important requirements for declaring an official U.S. recession, which now appears to have started at the turn of the year. Harvard University economist Martin Feldstein, who heads up the National Bureau of Economic Research committee that makes the call on recession, has already indicated that December or January likely was the turning point.
A jobs report yesterday showed that employers nationwide slashed 85,000 jobs since the beginning of the year, in the clearest sign yet that the economy has entered or is verging on recession.
The news changed the political discourse, with President Bush urging confidence even as the White House acknowledged for the first time that the economy may be contracting rather than growing.
Bush's top economic adviser, Edward Lazear, acknowledged yesterday that the economy may dip into negative territory in the current quarter, according to the Associated Press. Mr. Lazear's comment was the most pessimistic assessment heard out of the administration. He would not discuss whether the White House believes the economy will actually fall into a recession, AP reported.
Cutbacks in nearly every industry caused people to drop out of the work force, sent consumer confidence plummeting and prompted the Federal Reserve to pump another $200 billion into credit markets to try to revive growth.
The job losses were heaviest in housing construction and manufacturing, where the cumulative effects of a two-year recession in housing have hit hardest. But retailers also cut 34,000 positions as consumers grew gun-shy about spending last month, and the weakness spread to one of the sturdiest sectors — professional and business services — which lost 20,000 jobs.
Health care, restaurants and state and local education were among the only sectors to post employment growth, according to the Labor Department report.
The dismal job outlook prompted nearly 500,000 people since December to give up looking for a job, drawing down the unemployment rate to 4.8 percent from 5 percent.
Economists said the two-month net loss of 85,000 jobs meets one of the most important requirements for declaring an official U.S. recession, which now appears to have started at the turn of the year. Harvard University economist Martin Feldstein, who heads up the National Bureau of Economic Research committee that makes the call on recession, has already indicated that December or January likely was the turning point.