Ali’s blog

Mostly quant stuff with occasional digressions

More job losses and a weaker dollar

Posted by alifinmath on March 7, 2008

In the FT:

US employers cut jobs by the most in five years last month, increasing the odds that the economy has fallen into recession.

Non-farm payrolls fell 63,000 in February, the most since March 2003, marking a second consecutive monthly decline. Economists had expected an unchanged reading.

Adding to the headache for investors, January’s loss of 17,000 jobs was revised lower to a decline of 22,000 while an initial estimate of a gain of 82,000 jobs in December was cut to 41,000.

John Ryding, chief US economist at Bear Stearns, said back-to-back nonfarm payroll declines were “a strong indication that the economy has fallen into recession”.

I don’t understand why everyone is fixated about whether the country is technically in recession: it sounds like a red herring to me. Just take a walk outside and gauge for yourself. I live in downtown Minneapolis. At least four stores have closed down during the last two or three months. There are panhandlers on Nicollet who have been sitting out all day when the daytime high hasn’t been over 10 degrees fahrenheit. I feel physically chilled just walking in such temperatures; what must it be like sitting immobile? I can’t buy the argument that they’re idle good-for-nothings. Any sort of job has to better than freezing like that. On most interstate ramps in my vicinity I see panhandlers standing all day. I’m simply not interested in hair-splitting arguments about whether the country is technically in recession: all I need is the evidence of my eyes.

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