WASHINGTON (MarketWatch) -- The recession tightened its grip on U.S. businesses and consumers in February, according to economists, who are predicting the largest one-month job loss in almost 60 years.
"Pink slips continue to fly," said Meny Grauman, an economist for CIBC World Markets.
With output still falling at a dizzying rate, most companies are shedding unneeded workers and cutting back the hours of those remaining. Strapped by debt and seeing their paper wealth evaporating, many consumers are spending as little as they can.
"The economic patient is still in critical condition, with little medication to relieve the pain," wrote economists Brian Bethune and Nigel Gault of IHS Global Insight. "We will have to bite the bullet."
The first week of the new month brings two of the most important economic indicators: the ISM index and the nonfarm payrolls report. Both are expected to be very grim news
If the ISM is forecast to be awful, the nonfarm payrolls report is expected to be horrendous. The Labor Department is slated to report the figures Friday.
Economists expect payrolls to plunge 630,000 in February, slightly more then the 598,000 lost in January and the 597,000 lost in November. The unemployment rate is expected to climb to 7.9% from 7.6%, breaking through the 7.8% peak in the 1991 recession to the highest level since 1984.
It would mean that a record 4.2 million jobs will have been lost since the recession began in December 2007, with no end in sight.
"Employment losses have deepened considerably in recent months," wrote economists for Wachovia, who expect total losses for the recession to top 6.5 million.
"With total revenue declining at its worst pace since the late 1950s, many businesses and governments are in survival mode and have no choice but to cut jobs," Wachovia economists said
The main evidence for a worsening job market has been the rise in unemployment benefits. First-time claims have risen decisively over 600,000, nearly double the level at the beginning of the recession. Continuing claims are at an all-time high. Consumer surveys also show extreme pessimism about finding a job.
While some forecasters think job losses in February stayed in the ballpark of about 590,000, a few economists think the labor market got much worse in February and are expecting losses of 650,000, 700,000, or in one case, even 800,000.
