Employment report: Manufacturing leads in job losses
Kevin G. Hall, McClatchy Newspapers -- Manufacturing Business Technology, 3/10/2008 11:12:00 AM
The manufacturing sector is suffering the most when it comes to job losses, according to the most recent figures released by The Bureau of Labor Statistics. Numbers released late laste week showed U.S. manufacturers shedding 52,000 jobs in February, bringing the 12-month total to nearly 300,000.
The economy overall showed a loss of 63,000 jobs in February, according to the bureau. Those numbers stood in stark contrast to the forecasts of most mainstream economists, who'd predicted an increase of about 25,000 jobs in February.
This unexpected dip in employment lends credence to those who say the U.S. economy is in recession.
February marked the second consecutive month in which employment has declined, a trend most often associated with recession. The Bureau of Labor Statistics also issued a new count of how many non-farm payroll jobs were lost in January, boosting it from 17,000 to 22,000 positions.
The steep job losses brought President Bush out for a statement in front of White House cameras. He signaled that he's aware of the fiscal hardships that Americans face and said that last month's economic stimulus package, including tax rebates to consumers, should improve the economy in coming months.
"I know this is a difficult time for our economy, but we recognized the problem early and provided the economy with a booster shot," the president said. "We will begin to see the impact over the coming months."
Afterward, a Treasury Department statement sought to talk up the economy. With oil hovering around $105 a barrel and the cost of wheat, corn and other commodities driving up food prices, the Treasury stressed that the core inflation rate remained contained at 2.5 percent.
It was an odd choice for positive news, since core inflation doesn't include the high prices in the volatile food and energy sectors. In effect, this measure of inflation ignores the record prices that Americans are paying at the gas pump and the grocery store. The latest reading of the consumer price index, which measures what Americans pay at the cash register, was almost double the core rate and stood at 4.3 percent for the 12-month period that ended in January.
While Bush and the Treasury Department avoided using the "R" word—recession—the head of the president's Council of Economic Advisers left open that possibility.
"We are going to have a weak-growth quarter, and whether you call that a recession or not is something that we won't know for many months," Ed Lazear, the council's chairman, said at the White House.
Many economists disagreed.
"Sure looks like a recession, with exports remaining the only bright spot in the U.S. economy," John Silvia, chief economist for Charlotte, N.C.-based Wachovia, said in a note to investors.
Later, in announcing a conference call to revise their forecast, Wachovia's economic researchers wrote: "We now expect the U.S. has entered its first recession in seven years, as economic activity likely contracted in the first quarter."
Nigel Gault, chief U.S. economist for forecaster Global Insight in Lexington, Mass., was equally blunt.
"The debate should no longer be about whether there is or is not a recession, only about how deep it will be," he told investors. "Private employment has now fallen for three months in a row, according to today's new data, with the steepest decline in February."
A textbook definition of recession is two consecutive quarters of negative economic growth. Recessions are dated after the fact by the National Bureau of Economic Research, which defines recession as a significant decline in economic activity spread across the economy and lasting over several months.
