gutteck
03-07-2008, 01:06 PM
http://www.reuters.com/article/newsOne/idUSN0731799020080307
By Emily Kaiser - Analysis
WASHINGTON (Reuters) - A second straight month of job losses all but ended the debate over whether the U.S. economy has slipped into recession. Now the question is how to get out.
"Turn out the lights. The party's over. We are in a recession," said Joseph Brusuelas, chief U.S. economist at IDEAglobal in New York.
Don't count on debt-laden households to spend their way back to growth. As for banks, they are preoccupied with cleaning up their balance sheets after seven months of credit turmoil, which means they are unlikely to throw open the cash spigots. The federal government is mired in debt as well.
All that adds up to a protracted period of deleveraging -- a fancy word for paring debt -- and perhaps an equally long period of subpar U.S. economic growth.
While most economists still believe that the economy will rebound in the second half of this year as U.S. Federal Reserve interest rate cuts and government tax rebates kick in, some are starting to push back the recovery date into 2009.
U.S. employers cut 63,000 jobs last month, according to Labor Department data released on Friday. That followed a loss of 22,000 jobs in January. December's job growth was only half as big as the government had earlier reported.
Economists even found bad news in the fact that the unemployment rate fell to 4.8 percent from 4.9 percent, noting that this was merely the result of a steep drop in the size of the work force because more people gave up looking for jobs.
Employment holds the key to the U.S. economy because jobs mean paychecks, paychecks mean consumer spending, and spending accounts for about 70 percent of the economy. Continued...
By Emily Kaiser - Analysis
WASHINGTON (Reuters) - A second straight month of job losses all but ended the debate over whether the U.S. economy has slipped into recession. Now the question is how to get out.
"Turn out the lights. The party's over. We are in a recession," said Joseph Brusuelas, chief U.S. economist at IDEAglobal in New York.
Don't count on debt-laden households to spend their way back to growth. As for banks, they are preoccupied with cleaning up their balance sheets after seven months of credit turmoil, which means they are unlikely to throw open the cash spigots. The federal government is mired in debt as well.
All that adds up to a protracted period of deleveraging -- a fancy word for paring debt -- and perhaps an equally long period of subpar U.S. economic growth.
While most economists still believe that the economy will rebound in the second half of this year as U.S. Federal Reserve interest rate cuts and government tax rebates kick in, some are starting to push back the recovery date into 2009.
U.S. employers cut 63,000 jobs last month, according to Labor Department data released on Friday. That followed a loss of 22,000 jobs in January. December's job growth was only half as big as the government had earlier reported.
Economists even found bad news in the fact that the unemployment rate fell to 4.8 percent from 4.9 percent, noting that this was merely the result of a steep drop in the size of the work force because more people gave up looking for jobs.
Employment holds the key to the U.S. economy because jobs mean paychecks, paychecks mean consumer spending, and spending accounts for about 70 percent of the economy. Continued...