Sharp Drop in Jobs Adds to Grim Picture of U.S. Economy (Worse than Analysts Expected)

[Hissyspit]

Source: New York Times

Sharp Drop in Jobs Adds to Grim Picture of U.S. Economy

Kevin P. Casey for The New York Times

In a report that was far worse than most analysts had expected, the Labor Department estimated that the nation lost 63,000 jobs in February. It was the second consecutive monthly decline, and the third straight drop for private-sector jobs.

Even before the bad news on jobs emerged, the Federal Reserve was already racing to ease the latest crisis in the credit markets, where seemingly rock-solid companies have been caught short because the markets are devaluing the collateral they had posted to back billions of dollars in loans. Much of that collateral consists of mortgages.

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Though monthly payroll data are notoriously volatile and subject to revision, the jobs report was so bleak that many of the few remaining optimists on Wall Street threw in the towel and conceded that the United States was already in a recession.

“Godot has arrived,” wrote Edward Yardeni, who had been one of Wall Street’s most relentlessly upbeat forecasters. “I’ve been rooting for the muddling through scenario. However, the credit crisis continues to worsen and has become a full-blown credit crunch, which is depressing the real economy.”

Read more: http://www.nytimes.com/2008/03/08/business/08econ.html?_r=1&ref=us&oref=slogin