Friday, March 6, 2009

Unemployment Rate Jumps to 8.1%, 651,000 Jobs Lost, U6 jumps to 16.0%...

Here’s a link to the official BLS report: BLS Data

While the “official” rate jumped from 7.5% to 8.1% (bad), the U6 rate which is closer to the way it was measured in the past launched to 16%. Here’s the Shadow Stats chart, it will update itself automatically when John Williams enters the new data:

Chart of U.S. Unemployment

Employers in U.S. Cut 651,000 Jobs; Unemployment Rose to 8.1%

By Bob Willis

March 6 (Bloomberg) -- The U.S. unemployment rate surged in February to the highest level in more than 25 years and the economy lost more than 600,000 jobs for a third consecutive month, pointing to further reductions in spending.

Payrolls fell by 651,000 and revisions for the prior two months lopped off an additional 161,000 jobs, the Labor Department said today in Washington. The jobless rate surged to 8.1 percent, more than forecast and the highest since December 1983.

Tumbling demand globally is prompting companies from General Motors Corp. to Sears Holdings Corp. to step up firings, perpetuating a vicious circle of job losses and spending cuts. The Obama administration has set aside immediate concerns about a budget gap and pushed through a $787 billion stimulus plan aimed at creating or saving 3.5 million jobs.

``There is not a single sign that points to a bottom yet,'' Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York, said before the report. ``It is the worst recession in the postwar era.''

The payroll drop in January was revised up to 655,000 from 598,000 and December now shows a 681,000 drop, up from the 577,000 previously estimated. The December decline was the biggest since October 1949.

The U.S. economy has now lost almost 4.4 million jobs since the recession began in December 2007, the biggest employment slump of any economic downturn in the postwar period.

Payrolls were forecast to drop by 650,000, according to the median of 80 economists surveyed by Bloomberg News. Estimates ranged from losses of 500,000 to 800,000.

Factory Jobs
The jobless rate was projected to jump to 7.9 percent. Forecasts ranged from 7.8 percent to 8.1 percent.

Today's report showed factory payrolls fell by 168,000 after declining 257,000 in the prior month. Economists forecast a drop of 200,000. The decrease included a loss of 25,300 jobs in producers of machinery and 27,500 in makers of fabricated metal products.

Automakers, at the heart of the manufacturing slump, continued to slash jobs and trim costs to stay in business. General Motors last month said it would cut 47,000 more positions globally while Chrysler LLC announced 3,000 more layoffs.

Auto-parts makers are also suffering. Canton, Ohio-based Timken Co., the supplier of bearings to the world's top five carmakers, said March 2 it would eliminate as many as 400 salaried jobs this year.

Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 375,000 workers after cutting 276,000. Financial firms cut payrolls by 44,000, after a 52,000 decline the prior month. Retail payrolls decreased by 39,500 after a 38,500 drop.

`Very Difficult'
Sears last week said it would shutter 24 stores, on top of eight closings announced earlier, after its fourth-quarter profit fell 55 percent due to weak holiday sales.

``This past year was a very difficult year for the world economies and for retail in the United States, and 2009 needs to be the year of restoring confidence and trust in our financial system,'' Sears Chairman Edward Lampert said in a letter to shareholders.
Payrolls at builders fell by 104,000 after decreasing by 118,000, as home sales and prices continued to tumble.

Government payrolls increased by 9,000 after a gain of 31,000 the prior month, one of the few areas still hiring. Another 26,000 jobs were added by education and health providers.

Employers are holding the line on hours. The average work week held at 33.3 hours in February. Average weekly hours worked by factory workers dropped to 39.6 hours from 39.8 hours, while overtime also decreased to 2.6 hours from 2.8 hours. That brought the average weekly earnings up by $1 to $615.05.

Average Wages
Workers' average hourly wages rose 3 cents, or 0.2 percent, to $18.47 from $18.44 the prior month. Hourly earnings were 3.6 percent higher than February 2008. Economists surveyed by Bloomberg had forecast a 0.2 percent increase from January and a 3.8 percent gain for the 12-month period.

Bankruptcy filings for individuals and companies surged 37 percent in February to more than 103,000, according to data compiled by Automated Access to Court Electronic Records, a service of Jupiter ESources LLC in Oklahoma City. Slumping sales have caused recent Chapter 11 filings by retailers such as Everything But Water LLC, the largest U.S. retailer of women's swimwear, and Ritz Camera Centers Inc., the largest chain of camera stores.

Economists polled by Bloomberg last month forecast consumer spending will contract through the first six months of this year after sliding in the last half of 2008. Purchases have not contracted for four consecutive quarters since records began in 1947.

Here’s the market’s bullish reaction to the release. Yeah, they market must have been expecting a nuclear meltdown… “it was priced in.” LOL

Hey, while I was at Shadow Stats I noticed that the racing M1 money supply chart is bending back down all of the sudden. I’ll have more on that soon:

Chart of U.S. Money Supply Growth