More job losses to add to the pile up?
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Kai Ryssdal: I’m going to get out of the way and let the president deliver the punch line on today’s jobs report.
President Obama: The problem is accelerating, not decelerating. It’s getting worse, not getting better.
Even if you wanted to, it’s tough to argue with that — 598,000 jobs lost last month, the unemployment rate is now 7.6 percent. If we could plot this on a graph for you it would be a curve where the slope is rapidly approaching vertical.
Because as Marketplace’s Jeremy Hobson reports from Washington, sometimes accelerating job losses just lead to more job losses.
Jeremy Hobson: As if last month’s figures weren’t bad enough, turns out the Labor Department’s horrendous figures for last year were off. The number of jobs lost since the recession began in December of ’07 is now 3.6 million. Hundreds of thousands more than previously thought.
President Obama: That’s 3.6 million Americans who wake up every day wondering how they are going to pay their bills, stay in their homes, and provide for their children.
And it’s 3.6 million Americans doing a lot less spending. Stephen Tully of Pasadena, Calif. is one of them. He’s been laid off since March.
Stephen Tully: Well, we cut out a cell phone off of our account. We don’t go out to eat at all anymore. Whenever possible we drive together so that we don’t waste any extra gas.
He’s spending about $500 less per month than he used to. Kevin Hassett directs economic policy studies at the American Enterprise Institute. He says even people who still have jobs but think they could be next are cutting back.
Kevin Hassett: It’s clear that fear is driving people’s behavior right now. And that’s going to mean that there’s going to be reduced consumption and that’s going to lead to more job loss.
Hassett says big numbers like today’s scare employers too. That leads to bigger job cuts in anticipation of what the coming year will be like.
Hassett: Employers wonder what are my sales going to be. And start to think about what they can do to get their costs in line.
Something Hassett says they’ve already been doing for months. One reason that the unemployment number keeps snow-balling.
In Washington, I’m Jeremy Hobson for Marketplace.
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