The US economy hemorrhaged 651,000 jobs last month, pushing the unemployment rate to a 25-year high of 8.1 percent, official data on Friday showed, pointing to an ever-deepening recession.
The number of nonfarm job losses in the US Department of Labor report was in line with most forecasts but underscored the dire state of the economy as companies slash jobs to cope with an intensifying slump.
The department also sharply pushed up estimates for losses for the previous two months — 655,000 in January from 598,000, and 681,000 in December from 577,000.
That made December’s losses the worst on record since October 1949, officials said.
The unemployment rate rose from 7.6 percent in January to 8.1 percent last month, the highest since December 1983.
“It’s ugly and always seems to be uglier than the previous month,” said Robert MacIntosh, chief economist at investment firm Eaton Vance. “It’s a deep and dark recession.”
MacIntosh said the report suggests a long road to recovery for the battered economy.
“I think you have to go into 2010 to actually start to see growth,” he said.
US President Barack Obama said the “astounding” figures would cause him to redouble efforts to promote economic recovery.
“This country has never responded to a crisis by sitting on the sidelines and hoping for the best,” Obama said in Columbus, Ohio.
“We have a responsibility to act, and that’s what I intend to do as president,” he said.
Aaron Smith at Economy.com said the jobless rate could accelerate to 10 percent, making it harder for the US to pull itself out of the slump.
“The deteriorating job picture threatens to magnify the recession by further undermining income, spending and confidence,” Smith said.
“Although the government’s aggressive policy response will help, it will take time,” he said.
Yet some said there were modest signs of hope amid the gloom given a small improvement from December and January.
“It was an awful report but it was not a death spiral report,” said Cary Leahey, senior economist at Decision Economics, who said some had been bracing for losses of up to 1 million jobs.
“While things are terrible, we are tracking the 1981-82 recession very closely,” Leahey said.
Leahey added that with tax cuts and various financial rescues taking hold, “I don’t see why the economy can’t bottom in the next three to six months.”
Robert Brusca at FAO Economics said the report suggested the worst job losses are past.
“The revisions have made the trend looking ahead much less bad ... The pattern of declines no longer points to a continuing deceleration,” he said.
Officials said 4.4 million jobs have been lost since the recession began in December 2007, 2.6 million of them in the past four months.
The report showed a total 12.5 million unemployed in the US after a modest increase in the labor force.
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