The U.S. economy lost 63,000 jobs in February, a number much worse than expected. VOA's Barry Wood reports that economists are interpreting the data as evidence that the slowdown that began late last year is worsening.
A survey of leading economists a week ago predicted 35,000 new jobs would be added in February. But when the Labor Department released its report, it showed not a gain but a loss of 63,000 jobs. In addition, data for January that initially showed a loss of 17,000 was revised to 22,000. And even December's job gain of 82,000 was revised downwards by half.
Ellen Zentner is an economist at the Bank of Tokyo-Mitsubishi in New York.
"For most of us, we believe that recession is a foregone conclusion," she said. "Now that raises the question of how mild will it be or how deep could it be. And we think that the US economy will experience a recession in 2008, but that it will be very mild."
Zentner spoke on Bloomberg Television. A recession is usually defined as six consecutive months of negative growth. The U.S. economy grew at a meager six tenths of one percent annual rate in the last three months of 2007. The last U.S. recession was a short and mild one in 2001.
The February job loss figure was the biggest in nearly five years. The labor market-with a still low 4.8 percent unemployment rate is weakening at the same time that home prices are falling faster than at any time in over 40 years. Gary Shilling is a New York based economic forecaster. He believes the economy is in recession and that consumer spending will weaken further in the months ahead.
"Consumers are reacting to the fact that they no longer have that house [price] appreciation that was supporting their spending growth," he explained. "When you get layoffs on top of that it's a lethal combination for the economy."
Shilling spoke on CNBC Television.
To combat a slowing economy the Bush administration and the opposition controlled congress agreed to an economic stimulus package that will soon deliver advanced tax refunds of several hundred dollars to most taxpayers. In addition, the Federal Reserve has been aggressively cutting short-term interest rates, despite the inflationary pressure coming from higher oil and food prices. Critics say the measures are coming too late to avoid a significant slowdown.