Earn What You Spend

The Bureau of Labor Statistics released the payroll report for February: 651,000 job losses in February, bringing the unemployment rate to 8.1%.  According to the Bureau, the job losses cut across virtually every sector of the economy:

The number of unemployed persons increased by 851,000 to 12.5 million in
February, and the unemployment rate rose to 8.1 percent. Over the past 12
months, the number of unemployed persons has increased by about 5.0 million,
and the unemployment rate has risen by 3.3 percentage points.

So what started in the credit crisis continues to spread.  From the NYTimes: 

The pace of job losses has only increased since the credit crisis shook financial markets last autumn, spawning a vicious circle of economic contraction that dragged down corporate earnings, consumer spending and overall growth. And Mr. Bernanke said in testimony this week that the labor market “may have worsened further in recent weeks.”

Economists worry that mounting job losses could make it harder for homeowners to make their mortgage payments, triggering another wave of home foreclosures, which would further depress home values and the mortgage-related securities owned by major banks.

“We’re feeling the negative fallout from the intensification of the financial crisis,” Mickey Levy, chief economist at Bank of America, said. “We’re in the middle of the worst stage of job losses as well as the speed of contraction of gross domestic product.”

You can find more analysis of what this means here and here.