US Sheds 651,000 Jobs, Unemployment at 8.1 pct

Washington (AFP) - The economy shed 651,000 jobs in February, pushing the unemployment rate up to 8.1 percent, according to government data Friday highlighting the worst month for the labor market since 1983.

The number of job losses was in line with most forecasts but underscored the dire state of the economy as companies reduce their workforce to cope with the deepening slump.

The Labor Department also revised up its estimate for losses for the previous two months -- 655,000 in January from 598,000, and 681,000 in December from 577,000. The figures showed December's losses as the worst on record since October 1949, officials said.

The jobless rate rose from 7.6 in January to 8.1 percent in February, the highest since December 1983.

Officials said 4.4 million jobs have been lost since the recession began in December 2007, with 2.6 million in the past four months.

The goods-producing sector shed 276,000 jobs in February while services lost 375,000. Within the goods-producing sector, manufacturing lost 168,000 jobs.

Among the few sectors showing modest job gains were education and government.

The number of persons who worked part-time for economic reasons in February -- sometimes referred to as involuntary part-time workers -- rose by 787,000, reaching 8.6 million. This includes people who would like to work full time but were working part time because their hours had been cut back or because they were unable to find full-time jobs.

The jobs report underscores the challenges facing President Barack Obama's administration in stabilizing a teetering financial system and pulling the shrinking economy out of a second year of recession.

Based on the most recent government estimate, the US economy contracted at an eye-popping 6.2 percent pace in the fourth quarter of 2008, and some analysts say the downturn may be even worse in the first quarter of 2009.

Obama Foreclosure Plan to Aid Refinancings
If you haven’t been able to refinance because you lack equity in your home, check out the plan.
By Kenneth R. Harney / The Nation’s Housing  |  Sunday, March 8,2009  |  http://www.bostonherald.com  |  Real Estate

Key details have begun surfacing about the extraordinary refinancing deals that President Obama’s foreclosure-prevention plan will offer an estimated 4 million to 5 million U.S. homeowners.

Obama’s plan aims to help borrowers who are current on their loans, but can’t refinance into today’s low rates because these homeowners have little or no equity in tbeir properties.

Homeowners generally need 20 percent equity to refinance into cheaper loans. However, many people bought homes with less than 20 percent down during the housing boom.

Worse, declining property values mean that even those who did make 20 percent down payments often find they no longer meet the 20 percent rule.

Now, you can still refinance in such cases if you pay for private mortgage insurance (PMI). But it’s tough to get PMI these days in some parts of the country. PMI firms are reluctant to write policies “declining” markets large areas that the firms fear could face further home-price declines.

As a result, tens of thousands of Americans are finding that they can’t refinance. Even though mortgage rates are currently running around 5 percent, these homeowners are stuck with 65 percent mortgage rates or worse.

But under Obama’s plan, government-backed mortgage giants Fannie Mae and Freddie Mac will essentially waive the 20 percent rule on any mortgages they back.

In fact, they’ll even allow homeowners to be slightly “under water,” owing more on a home that its current market value.

The worst recession since World War II? Shaping up that way
Kevin G. Hall | McClatchy Newspapers
March 06, 2009

WASHINGTON — The government's report Friday of an 8.1 percent unemployment rate equals the jobless number that the Obama administration has projected for the entire year. Few economists think that optimistic projection will hold, and many think that more big job losses are likely, with grim implications for the housing and banking crises.

Employers shed another 651,000 jobs in February, the Labor Department said Friday, pushing the nation's unemployment rate up from 7.6 percent to 8.1 percent. That's the highest jobless rate in a quarter-century and a clear sign that the deep U.S. economic recession isn't abating.

The monthly Employment Situation Summary also revised the jobs numbers for December and January downward, for a combined 161,000 more lost jobs than had been reported earlier. This pointed to a steeper economic contraction early this year than all but the gloomiest forecasters had projected.

Underscoring the rapid pace of decline, the department's Bureau of Labor Statistics reported that payroll employment has fallen by 2.6 million people in the past four months alone. Over the past 12 months, the number of unemployed has increased by about 5 million. Some 12.5 million Americans are now jobless.

"This is what falling off a cliff looks like," said Larry Mishel, the president of the liberal Economic Policy Institute. Mishel looked at trends in the first 14 months of past recessions and concluded that "we've seen the sharpest decline in employment and the sharpest decline in private sector hours worked — a 5.5 percent decline — than in any recession in 50 years."

WASHINGTON – President Barack Obama plans to announce Monday a former Secret Service agent who helped expose lobbyists' corruption at the Interior Department as his pick to oversee the $787 billion economic stimulus plan.

Obama is set to name Earl Devaney as chairman of the new Recovery Act Transparency and Accountability Board, an administration official said Sunday. Vice President Joe Biden also will be given a role coordinating oversight of stimulus spending.

Official: Obama Plans to Slash Deficit in Half
By Liz Sidoti, Associated Press
Sun Feb 22, 2009

WASHINGTON – President Barack Obama has committed hundreds of billions of dollars to help revive the economy and is working on a plan to cut the federal deficit in half by the end of his first term.

Obama will touch on his efforts to restore fiscal discipline at a White House fiscal policy summit on Monday and in an address to Congress on Tuesday. On Thursday he plans to send at least a summary of his first budget request to Capitol Hill. The bottom line, said an administration official Saturday, is to halve the federal deficit to $533 billion by the time his first term ends in 2013. He inherited a deficit of about $1.3 trillion from former President George W. Bush.