Jobless rate hits 8.1%, 651K jobs lost in February
posted at 2:16 pm on March 6, 2009 by Ed Morrissey
The Bureau of Labor Statistics announced the latest jobless numbers, and they’re bleak. Unemployment jumped a half percentage point to 8.1% as over 650,000 jobs were lost last month:
The nation’s unemployment rate rose to 8.1 percent in February, the Labor Department reported this morning, adding another grim indicator to an economic picture already darkened this week.
More than 650,000 people lost their jobs last month, pushing the unemployment rate up from 7.6 percent in January.
The jobless rate stood at its highest point since 1983.
The expectation of another reported increase in unemployment already was sending stock futures lower this morning in advance of trading on the final day of a week in which key indices had reached their lowest levels in more than a decade.
Oddly, though, by mid-day, the markets returned to just about their opening numbers. Wall Street obviously expected bad news, and didn’t seem shocked by it. Why should they be? The job losses matched those in January and December almost exactly, which is consistency of a most unpleasant sort. Plus, the Obama administration has busied itself by mostly talking about the crisis in panicked terms, which has the effect of keeping capital out of the market — and with it the engine of job creation.
The Obama administration appears to have belatedly recognized the problem. However, their plan to address it consists of the hair of the dog:
The government is seeking to resuscitate the nation’s crippled financial system by forging an alliance with the very outfits that most benefited from the bonanza preceding the collapse of the credit markets: hedge funds and private-equity firms.
The initiative to revive the consumer lending business, outlined by officials this week, offers these wealthy investors a new chance to make sizable profits — but, thanks to the government, without the risk of massive losses.
The idea is to entice them to put their huge cash piles to work to stimulate the financial system. They would be invited to buy up recently issued, highly rated securities. These securities finance consumer lending, such as credit cards and student and auto loans.
The program, which could involve the government lending nearly $1 trillion to these investors, exceeds the size of every other federal effort to address the crisis so far. The initiative’s approach could be the model for future federal efforts to aid the credit markets, sources familiar with government planning said. Officials call this strategy a “public-private partnership,” but in essence the government is offering good deals to private investors to draw them into its rescue efforts.