Central bank chairman offers bleak assessment of the state of the economy.
On Tuesday Ben Bernanke, the chairman of the US central bank the Federal Reserve, admitted for the first time that a recession in the US was possible.
Adding to its bleak assessment, the Labour Department said that a combined 152,000 jobs were lost in January and February, sharply above the previous estimate of 85,000.
“We’re obviously not happy with today’s jobs report – the negative estimate of jobs and the increase in the unemployment rate,” Tony Fratto, a White House spokesman said on Friday.
“The weakness in this quarter has been expected with economic growth about flat and a soft jobs market. That’s why we quickly pushed for the economic stimulus package,” he said.
The figures drew calls from Democratic presidential hopefuls Hillary Clinton and Barack Obama for aid to families facing foreclosure on their homes in the subprime mortgage crisis.
John McCain, the presumptive Republican candidate, said tax cuts and and cuts in regulations were needed to foster growth.
Analysts were also pessimistic about the immediate future for the US economy.
“The labour market has indeed turned south,” said Joel Naroff, president of Naroff Economic Advisors.
“That was the one last bastion of hope to stay out of a recession. Now the question is: How deep and how long will it last?”
The economy has been battered by the effects of a housing collapse, a credit crunch and a financial system in turmoil.
“There doesn’t appear to be any silver lining. It shows that we’re right in the middle of a recession,” added Carl Lantz, a US interest rate strategist at Credit Suisse in New York.
“Our expectation is that it will be a longer recession than the last two, and we’re just in the beginning.”
Source: News Agencies