Job Losses Probably Escalated in February: U.S. Economy Preview

[UpInArms]

Source: Bloomberg

March 1 (Bloomberg) -- The U.S. probably hemorrhaged jobs in February at an even faster clip as the world’s largest economy sank to new depths, economists said before reports this week.

Employers cut payrolls by 650,000, the most since 1949, and the jobless rate probably surged to 7.9 percent, according to the median estimates in a Bloomberg News survey ahead of Labor Department figures March 6. Other reports may show industries from manufacturing to services weakened further.

Companies such as General Motors Corp. and Macy’s Inc. are stepping up the pace of firings as the worst financial crisis in seven decades causes sales around the globe to tumble. The Obama administration is promising its stimulus plan will save or create 3.5 million jobs and the Federal Reserve is flooding markets with liquidity to revive lending and restore growth.

“We’re not seeing any indication that we’re finding a bottom,” said Julia Coronado, a senior economist at Barclays Capital Inc. in New York. “We saw businesses pull back and consumers pull back across the board and that’s still working its way across the economy.”

The economy lost 598,000 jobs in January, bringing the total drop in employment since the recession began in December 2007 to 3.6 million, the most of any downturn since 1945.

Read more: http://www.bloomberg.com/apps/news?pid=20601087&sid=aKtf3asaEzGA&refer=home

[Ghost Dog]

1. Instead of 'markets' (ie. banks), why don't they try flooding potential 'buyers'

(ie. struggling small and mid-sized business, the lower-paid and unemployed) with liquidity and see what difference that makes?

[maseman]

2. The problem is that won't work

Buyers and businesses need to be able to access credit.

For example...I pay my credit card bill off every month. I have a Business Visa that would in the past allow me to go over my credit limit on a monthly basis which I did if I needed heavy travel. I'd pay it off but it was nice having tha flexability. No more.

Last month I was traveling and my card got declined at my hotel. When I inquired my CC company said I was at my credit limit. I argued they never shut me off before and they said times are different now.

That is one small example but many small businesses cannot get loans to grow, finance needed improvements, etc. So they are essentially not doing those growth opportunities or improvements.

[BadgerKid]

3. Bailout money needs to be conditional

in that it goes to smaller businesses. Otherwise, banks and CC companies don't have a reason to help business and instead shore up their own balance sheets.

[DallasNE]

4. Those Estimates Are Almost Certainly Low

January jobless claims were up a reported 598,000. There is a very good chance that those will be adjusted upwards. Tack on top of that the initial jobless claims that have increased sharply and the February number will likely be in the 680,000-690,000 range.