Employers slash jobs by most in 5 years - KSWO 7News | Breaking News, Weather and Sports

Employers slash jobs by most in 5 years

Washington_Employers slashed 63,000 jobs in February, the most in five years and the starkest sign yet that the country is heading dangerously toward recession or is in one already.

The Labor Department's report, released Friday, also indicated that the nation's unemployment rate dipped to 4.8 percent as hundreds of thousands of people - perhaps discouraged by their prospects - left the civilian labor force. The jobless rate was 4.9 percent in January.

Job losses were widespread, with hefty cuts coming from construction, manufacturing, retailing, financial services and a variety of professional and business services. Those losses swamped gains elsewhere, including education and health care, leisure and hospitality and the government.

The latest snapshot of the nation's employment climate underscored the heavy toll of the housing and credit crises on companies, jobseekers and the overall economy.

To provide relief to persistent credit problems, the Federal Reserve announced Friday that it will increase the amount of loans it plans to make available to banks this month to $100 billion.

It has already provided a total of $160 billion in short-term loans to cash-strapped banks since the auctions began in December. The Fed's new step will involve making $100 billion available to a broad range of financial players through a series of separate transactions.

On Wall Street, the Dow Jones industrials were off around 15 points in morning trading as the Fed's actions helped to blunt worry about the eroding jobs situation.

The Labor report also showed that January's job losses were worse than the government first reported. Employers cut 22,000 jobs, versus 17,000.

It was the first monthly back-to-back job losses since May and June 2003, when the job market was still struggling to recover from the blows of the 2001 recession.

The health of the nation's job market is a critical factor shaping how the overall economy fares. If companies continue to cut back on hiring, that will spell more trouble.

"It certainly solidifies the notion that the economy has fallen into a recession," said Ken Mayland, economist at ClearView Economics.

Friday's report was much weaker than economists were expecting. They were forecasting employers to boost payrolls by around 25,000. However, they were also expecting the jobless rate to edge up to 5 percent. The reason why the jobless rate went down, rather than up, is because so many people stopped looking for work and left the labor force.

"We are disappointed any time you see a number showing lost jobs," Commerce Secretary Carlos Gutierrez told The Associated Press. "This is consistent with a slowdown," he said. Still, he was hopeful that the recently enacted economic stimulus package forged by the White House and Congress will help bolster the economy in the second half of this year.

Workers with jobs, however, saw modest wage gains.

Average hourly earnings for jobholders rose to $17.80 in February, a 0.3 percent increase from the previous month. That was on target with economists' forecasts. Over the last 12 months, wages were up 3.7 percent. With high energy and food prices, though, workers may feel squeezed and feel like their paychecks aren't stretching that far.

With the economy losing momentum, fears have grown that the country in on the brink of its first recession since 2001.

Economic growth slowed to a near standstill of just a 0.6 percent pace in the final quarter of last year. Many economists predict growth in the January-to-March quarter will be worse - around a 0.4 percent pace. Some believe the economy is shrinking now.

Spreading fallout from the housing and credit debacles are the main factors behind the economic slowdown. People and businesses alike are feeling the strains and have turned cautious. Adding to the stresses on pocketbooks, budgets and the economy: skyrocketing energy prices. Oil prices have set a string of record highs in recent days. Gasoline prices have marched higher, too.

To help shore up the economy, Federal Reserve Chairman Ben Bernanke signaled last week that the central bank is prepared to lower interest rates again. Economists predict another cut on March 18, the Fed's next meeting. The Fed, which has been slicing the rate since September, recently turned more forceful. It slashed the rate by 1.25 percentage points in the course of just eight days in January - the biggest one-month reduction in a quarter century.

The White House and Congress, meanwhile, speedily enacted an economic relief package, including tax rebates for people and tax breaks for businesses. That - along with the Fed's rate cuts - should help give a lift to the economy in the second half of this year, says Bernanke.

Still, unemployment is expected to move higher this year. The Federal Reserve predict the jobless rate will rise to as high as 5.3 percent in 2008. Last year, the unemployment rate averaged 4.6 percent.

All the economy's troubles are putting people in a gloomy mood.

According to the RBC Cash Index, confidence sank to a mark of 33.1 in early March, the worst reading since the index began in 2002.

© 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
  • Local NewsNewsMore>>

  • Jury awards $289M to man who blames Roundup for cancer

    Jury awards $289M to man who blames Roundup for cancer

    Saturday, August 11 2018 2:10 AM EDT2018-08-11 06:10:04 GMT
    Wednesday, August 15 2018 5:14 PM EDT2018-08-15 21:14:37 GMT
    (Josh Edelson/Pool Photo via AP, File). FILE - In this July, 9, 2018, file photo, plaintiff DeWayne Johnson looks up during a brief break as the Monsanto trial in San Francisco. Monsanto is being accused of hiding the dangers of its popular Roundup pro...(Josh Edelson/Pool Photo via AP, File). FILE - In this July, 9, 2018, file photo, plaintiff DeWayne Johnson looks up during a brief break as the Monsanto trial in San Francisco. Monsanto is being accused of hiding the dangers of its popular Roundup pro...

    Lawyers say a jury's $289 million award to a California man who claims Monsanto's Roundup weed killer gave him cancer may open the floodgates for legions of people suffering because of the agribusiness giant.

    Lawyers say a jury's $289 million award to a California man who claims Monsanto's Roundup weed killer gave him cancer may open the floodgates for legions of people suffering because of the agribusiness giant.

  • White House called toxins contamination 'PR nightmare'

    White House called toxins contamination 'PR nightmare'

    Monday, August 13 2018 1:38 AM EDT2018-08-13 05:38:00 GMT
    Wednesday, August 15 2018 5:14 PM EDT2018-08-15 21:14:28 GMT
    Officials are demanding that the EPA act quickly to clean up local water systems testing positive for dangerous levels of PFAS. (Source: Raycom Media)Officials are demanding that the EPA act quickly to clean up local water systems testing positive for dangerous levels of PFAS. (Source: Raycom Media)

    Officials are demanding that the EPA act quickly to clean up local water systems testing positive for dangerous levels of chemicals used in nonstick cookware, fast-food wrappers and much more.

    Officials are demanding that the EPA act quickly to clean up local water systems testing positive for dangerous levels of chemicals used in nonstick cookware, fast-food wrappers and much more.

  • breaking

    Duncan teen hit by truck while riding bike

    Duncan teen hit by truck while riding bike

    Wednesday, August 15 2018 5:13 PM EDT2018-08-15 21:13:35 GMT
    (Source KSWO)(Source KSWO)

    According to officials, the accident happened near 12th and Pine earlier Wednesday afternoon. The driver of the truck was an off-duty law enforcement officer.

    According to officials, the accident happened near 12th and Pine earlier Wednesday afternoon. The driver of the truck was an off-duty law enforcement officer.

Powered by Frankly