Jobs post biggest drop in 5 years

[HRx]

By Chris Isidore, CNNMoney.com
Last Updated: March 7, 2008: 8:55 AM EST

NEW YORK (CNNMoney.com) -- Employers made their deepest cut in staffing in in almost five years in February, according to a closely watched government report Friday that showed the labor market far weaker than expected, fueling already building recession fears.

There was a net loss of 63,000 jobs, according to the Labor Department, which is the biggest decline since March 2003 and weaker than the revised 22,000 job loss reported for January. Economists surveyed by Briefing.com had forecast a gain of 25,000 jobs in the most recent reading.

The job loss was widespread, reaching beyond the battered construction sector, which lost 39,000 and manufacturing, where job losses hit 52,000. Retailers cut 34,000 jobs, while business and professional services cut 20,000 jobs.

Temporary staffing firms cut nearly 28,000 jobs off their payrolls, another warning sign of employers pulling back, and hotels cut about 4,000 jobs, a sign that discretionary consumer spending could be on the wane.

Overall the private sector cut 101,000 jobs, with only a gain in government employment limiting losses.

Despite the job loss, the unemployment improved to 4.8% from the 4.9% reading in January. Economists had forecast the unemployment rate would rise to 5%. The rate fell because of a big jump in the number of people that the government counted as no longer in the labor force.

The labor market has weakened significantly in recent months, prompting fears of recession along with a $170 billion economic stimulus package and a series of interest rate cuts from the Federal Reserve.

The Fed is next set to meet March 18 to consider what to do with interest rates. Friday's report would seem to suggest more rate cuts are on the way, despite the improved unemployment rate.

First Published: March 7, 2008: 8:40 AM EST

[chpxiii]

I have a baaaaaaad feeling about this particular recession.

[HRx]

Another thing to keep in mind is the national and state level unemployment rates that are published aren't accurate numbers either...because the methodology they use to calculate thier percentages doesn't require them to factor in people who've been unemployed longer than 6 months, people that simply stop looking for work because they couldn't land a decent job, and peoples who unemployment insurance expired, et cetera. Therefore, once you factor these into the equation the national and state rates would be significantly higher than what's being reported.

[HRx]

And...I agree with you that I think this recession is going to be significantly worse than the one we had a few years ago, in terms of magnitude and length! And believe me I hope I'm wrong about this!

[MajorMike]

I heard this on the news...wow, it's so sad, isn't it??? I see a heck of a lot of BKers on the horizon...

[HHM]

To put a positive spin on this...despite the calculations, in the grand scheme of things, 63,000 is not a large number. It is only significant because it is the first month that we have had a net negative loss in jobs. The news has a way of sensationalizing these numbers beyond their true significance.

Please review the stats and the notes for your self at

http://www.bls.gov/ces/home.htm

before you buy into the snap judgments of the media.

[Lindsay]

And...I agree with you that I think this recession is going to be significantly worse than the one we had a few years ago, in terms of magnitude and length! And believe me I hope I'm wrong about this!

I agree too. I have a real bad impending feeling of doom about the current economy. I hope things can be better soon. I was hoping to file the BK, get a fresh start and hopefully prosper. A recession or depression really makes me nervous.

I can't believe the DOW fell below 12,000 today. I went to the grocery store tonight and the prices had all gone up again. On the news, they said gas will most likely be $4 a gallon by summer. My heating bill is $450 and I've been cold! I keep the heat way down. I'm really worried about all this.

[diviaruba]

To put a positive spin on this...despite the calculations, in the grand scheme of things, 63,000 is not a large number. It is only significant because it is the first month that we have had a net negative loss in jobs. The news has a way of sensationalizing these numbers beyond their true significance.

Please review the stats and the notes for your self at

http://www.bls.gov/ces/home.htm

before you buy into the snap judgments of the media.

Two things you need to remember on this, though. First, the economy needs to create north of 150,000 jobs per month just to keep up with growth of the labor force. That is the "stall speed" Anything less is a net negative for the employment picture.

Second, everything in the macro-economic world is what happens at the margin. In other words, while the job loss numbers seem slight, compared to the number of employed, there is a ripple effect as the national income figures decline. If I lose my job, then I am less likely to spend the money that keeps you in your job.

[debtmonster]

crash

And...I agree with you that I think this recession is going to be significantly worse than the one we had a few years ago, in terms of magnitude and length! And believe me I hope I'm wrong about this!

Nope. You're not wrong. There's not much you can do about it. It's a cyclical thing. Read the book from Harry S. Dent. "The Next Great Bubble Boom: How to Profit from the Greatest Boom in History, 2005-2009".

Some of the stuff is a little off, but for the most part, he's right on the money. He predicted a lot of stuff in the past with amazing accuracy. The book shows all of the stuff with the presidents changing and what causes the DOW to shoot to the moon and back down again. He says this next recession will be like the one in Japan and will last over a decade. He said it will be the very worst economic times in our life time since the crash of 1929.

Maybe I should study to be a BK Lawyer because those will be the only people making the big bucks during this long ride... just the way I.T. was making the big bucks up until the DOT COM bust.

The housing market killed us. The things we're seeing now were not supposed to happen until 2009. Something triggered it off early. I guess some of the people working at the banks read his book and that short circuited the whole thing.

Guess I shouldn't expect to get a job until 2021... unless I decide to get into healthcare.

[epiphany]

We had major layoffs at my company (large company) last week. It was a very sad day. My department was not affected in my division but who knows what will happen in the near future.

One comment I would like to make about all the jobs that were supposedly created prior to this recession is that most were created by eliminiating higher paying jobs and creating those which provided lower wages (read: not enough to live on). This is a foolish practice as it creates high turnover, inexperienced staff make costly mistakes, and training costs soar.

This country been spiraling towards this recession for the last 6 or so years. It is now just being realized (or reluctantly admitted if that) by the hard core naysayers.

I've been saying that for the past several years that if one more person tells me how great the economy is Ima gonna lose it!

EP

[debtmonster]

The people running that company should get jail-time for letting those people go. It just contributes to making the economy worse by dumping employees. All of those people will stop spending money now which will cause somebody else their job.

I remember working at a company up north. They laid off 3,000 people. It happened in waves. I got hit in the wave around the 5th month of it happening.

So are we simply to just file bankruptcy now every 8 years because these recessions and layoffs seem to keep happening like clockwork. By the time I start to get back on my feet and accumulating things, I end up losing everything I worked for. I'm getting a little tired of this happening every few years.

[Flamingo]

The people running that company should get jail-time for letting those people go. It just contributes to making the economy worse by dumping employees. All of those people will stop spending money now which will cause somebody else their job.

I remember working at a company up north. They laid off 3,000 people. It happened in waves. I got hit in the wave around the 5th month of it happening.

So are we simply to just file bankruptcy now every 8 years because these recessions and layoffs seem to keep happening like clockwork. By the time I start to get back on my feet and accumulating things, I end up losing everything I worked for. I'm getting a little tired of this happening every few years.

The people running the companies have no choice but to cut spending due to the decline in receipts that keeps the company running so when they cut expenses the employees are usually the first to go because that is the highest financial outlay. There is no reason for employers/companies to get jail time for doing that - it is not their fault. It's business. If you don't have the money coming in, you can't pay the employees and the company's operating expenses. Just like in a household, if your hours are cut in your job, you quit going out to dinner or cut back on something else. Same in business. So you can see how it spirals down when people are let go. They stop generating into the economy also which hits retail and other business/industries also; including dining, travel and hotels. Remember what occurred following 9/11? What people need to learn from all this is that no one is expendable on their job. Be prepared for the job loss always cause it can happen - it happened to my husband in 2001 which caused us to file in 2002 - there is no way you can survive on a 70% loss of income and pay your bills. We tried for a year, used all our savings, robbed Peter to pay Paul and just got further in debt after he could not find a comparable even close paying job to his former position. Had we filed shortly after he lost his job, we would have been better off in the long run. But we tried not to file due to the stigma and embarrassment. It was hard to get through it but in one year it will be off our credit reports and we have learned to keep credit in rein, do without unless it is absolutely needed and have cash in hand before we do a major purchase. If a job loss should hit again, we are better prepared with little unsecured debt and would be much better able to survive than before.

My mother was born in 1917 and lived through the depression. She told me horror stories of being a young girl and what she saw. Her family was better off because her dad held his job throughout the depression as he worked for the railroad. She came from a family of 8 children and most families were that large back then. Women just did not work outside the home so you can imagine if a salary was lost. She always told me it could happen again and to be prepared. People lost everything and it can happen again and we are just getting a glimpse of how it can all start. Also, credit cards were not available or even imagined at that time - just think of all the losses and what could happen during this day and age if something similar should occur? People could be homeless, jobless and pennyless moreso than ever before.

[debtmonster]

That's why I want to hold off on the bankruptcy so badly. What if I file chapter 7 and then in 2 more years I lose my house? I want to file bankruptcy on the foreclosure as well. These are the reasons why I don't want to file so quickly. It has to be planned out properly. I want to see if this recession really hits us like 1929. If it does, then I want to do a Ch 7 in 2010 or 2011.