-- Another month of unexpectedly dismal job creation across the
United States has sent shockwaves rippling out from Main Street to
Wall Street and the White House.
U.S. employers added just 21,000 jobs to a work force of nearly
140 million in February -- well below the most pessimistic
forecasts. The jobless rate was unchanged at 5.6 per cent, as more
Americans abandoned their quest for work.
The disappointing report sent the U.S. dollar and bond yields
sharply lower yesterday as investors digested a fourth consecutive
month of subpar job creation. The Canadian dollar surged
two-thirds of a cent (U.S.) to end the day at 75.66 cents, while
the euro had its best day in five weeks, rising to $1.2374 from
$1.2203 on Thursday.
More broadly, the weak labour market is fuelling fear the
mighty U.S. economy is in the throes of a destabilizing jobless
Companies are producing more, driving their profits higher, but
doing it all without adding new workers -- at least not in the
"Businesses seem to be doing everything they can to
increase profits without increasing hiring," concluded Bill
Cheney, chief economist at John Hancock Financial Services in
The economy's persistent failure to generate jobs is also
becoming a big headache for U.S. President George W. Bush, who is
struggling to convince Americans they should re-elect him in
November, even though 2.3 million jobs have vanished on his watch.
Barring a stunning jobs comeback, he will become the first U.S.
President since Herbert Hoover during the Great Depression to
preside over a net loss of jobs during a four-year term.
U.S. Treasury Secretary John Snow urged Americans to be
patient, insisting that the Bush administration's elixir of tax
cuts has produced strong economic growth and that jobs aren't far
"We have turned the corner on growth and I'm confident
we'll see strong job numbers in the month ahead," Mr. Snow
Democrats could hardly contain their glee. Massachusetts
Senator John Kerry, who has all but secured the Democratic
presidential nomination, seized on the numbers to attack Mr.
Bush's economic stewardship. Mr. Kerry said the best way to put
Americans back to work would be to give Mr. Bush a new job.
"At this rate, the Bush administration won't create its first
job for more than 10 years," Mr. Kerry said.
Economists spent much of yesterday scrambling to outdo each
other with expressions of disappointment and surprise over the
virtual absence of new jobs. They used words such as
"shocking," "dismal," "disastrous,"
"bleak" and "ugly" to describe the numbers.
The consensus among economists was that the economy would
generate 130,000 jobs in February. Instead, there were just
Economists, who typically look for a silver lining, were
struggling to find something good to say.
"Beneath the headlines, the picture is even bleaker,"
economist Kathy Bostjancik of Merrill Lynch in New York told
clients in a report.
Manufacturers shed 3,000 jobs, extending to 43 consecutive
months that the sector has lost jobs. Construction employment fell
by 24,000. Without modest gains in temporary and government jobs,
the economy would have actually shed jobs in February.
"You go through all the major job categories and there
just isn't any job growth anywhere," lamented Joseph LaVorgna,
chief fixed-income economist at Deutsche Bank Securities in New
He and other economists continue to debate how an economy that
seems to be growing rapidly can generate so few jobs. (On an
annual basis, the economy grew 8.2 and 4.1 per cent respectively
in the third and fourth quarters of last year.)
Many say the answer lies in a remarkable technology-driven
surge in productivity, which has made it easier for businesses of
all kinds to do more with fewer workers. There has also been a
movement of some jobs overseas, though economists differ on the
magnitude of the so-called offshoring problem.