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 recessions toll,the Bureau of Labor Statistics reported on Friday that the unemployment rate in the United States surged to 8.1 per cent last month,the highest in 25 years. The economy has now shed more than 4.4 million jobs since the recession started in December 2007. Economists expect that unemployment will continue to rise for the rest of the year and into early 2010,with the unemployment rate reaching 9 to 10 per cent by the time a recovery begins. This is not people being on furlough for six weeks or a month or two this is permanent job losses,and that is what makes this so difficult, said John Silvia,chief economist at Wachovia. That is very telling in terms of how were really restructuring the overall economy. 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,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 in paychecks beginning April 1. 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. It just feels like were 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. Were feeling the negative fallout from the intensification of the financial crisis, Mickey Levy,chief economist at Bank of America,said. Were 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. 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. Theres been no place to hide, 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 companys going to do. Big companies routinely carry out scattered layoffs that are small enough to stay under the radar,contributing to an unemployment rate that keeps climbing.
