The revised December jobs loss of 681,000 is the largest in 59 years, according to a new report by Standard & Poor's analysts, David Wyss and Beth Ann Bovino. Payrolls plunged another 651,000 in February, while December and January were revised downward, bringing job losses during the recession to 4.4 million. The unemployment rate surged to 8.1%, its highest level since 1983. U.S. jobless claims fell 31,000 to 639,000 for the week ended Feb. 28. Continuing claims dropped 14,000 to 5.106 million in the week ended Feb. 21 from the record set the previous week. The insured unemployment rate held at 3.8%. Because of downward revisions to December and January, the three-month loss is now 2.0 million jobs. The losses were split between goods-producing (down 276,000) and service-producing (down 375,000) industries. Manufacturing lost another 168,000 jobs, with the largest declines in fabricated metals (27,500) and machinery (25,300). Construction declined another 104,000. The service sector lost 375,000 jobs, with another 124,000 job loss in trade and transportation services, 44,000 in finance, and 180,000 in professional and business services, including 77,700 in temporary help services--often a leading sector for employment. The only islands of strength were health care (up 26,900) and local government (up 12,000). Other economic releases revealed: Consumer spending rose 0.6% in January, while incomes climbed 0.4%. Disposable income jumped 1.7% because of lower tax payments, raising the saving rate to 5.0%. Sales of light vehicles fell to a new 26-year low of 9.1 million units in February, from 9.3 million in January. Sales at major retail chains were flat from a year ago in February. Consumer credit outstanding rose $1.8 billion in January. The Institute for Supply Management reports that its survey of manufacturing purchasing managers edged up to 35.8 in February from 35.6. The nonmanufacturing Report on Business fell to 41.6 from 42.9. Orders for manufactured goods fell 1.9% in January, the sixth consecutive drop. Productivity in the nonfarm business sector fell 0.4% in the fourth quarter, but remains up 2.2% from a year earlier. First American Corelogic reports that 8.3 million Americans (20% of mortgages) are underwater (house value less than amount of mortgage) as of December, up from 7.6 million in September. Meanwhile, the Mortgage Bankers Association reported that a record 7.9% of mortgages were delinquent in the fourth quarter, and that a record 3.3% were in process of foreclosure. The Beige Book showed that the Federal Reserve remains pessimistic about the U.S. economy, confirming the view that monetary policy will remain as loose as possible. Other central banks seemed equally concerned. The Bank of Canada, European Central Bank, and the Bank of England all cut their lending rates by 50 basis points this week, to 0.5%, 1.5% and 0.5%, respectively. Fears about banking and autos stocks sent the market down sharply this week, with two drops of more than 4%.
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