Bush confident of stimulus package amid sharp job losses

March 8th, 2008 - 7:06 am ICT by admin  

Washington, March 8 (DPA) US President George W. Bush defended the actions his administration has taken to bolster the lagging US economy amid a report Friday of a sharp loss of jobs in February. Bush insisted the $150-billion stimulus package passed by Congress and signed last month would boost consumer spending and help create jobs.

The Labour Department Friday said the US shed 63,000 jobs in February, the most in five years and fuelling speculation that the world’s largest economy may have already entered a recession.

The unemployment rate dipped slightly to 4.8 percent on the month due to a contraction in the labour force. The department also reported a revised 22,000 jobs lost in January, when unemployment stood at 4.9 percent.

Analysts had predicted an increase in jobs of 23,000 and a jobless rate of 5 percent for February, Bloomberg News reported.

Bush conceded that economic activity was slowing and said the economic stimulus package would soon begin to have an impact. The measure will start delivering tax rebates to individual taxpayers in May.

“I know this is a difficult time for our economy, but we recognised the problem early, and provided the economy with a booster shot,” Bush said.

US growth slowed to 0.6 percent in the fourth quarter of 2007 as the housing and credit crisis appeared to be spreading to other sectors. Economic data including a contraction in the manufacturing sector has suggested the US may already be in a recession.

The jobs report Friday overshadowed a new plan by the Federal Reserve to boost emergency lending to struggling banks.

The Fed announced it would make available as much as $200 billion in loans to banks, which have reported billions of dollars in write-downs as a result of an unprecedented number of homeowners defaulting on subprime mortgages given to those with bad credit.

The new job data will likely increase pressure on the Fed to lower interest rates at its next meeting March 18 by as much as 0.75 percentage points. The Fed twice slashed its benchmark rate in January by a combined 1.25 points to 3 percent.

The Labour Department said employment fell in the manufacturing, construction, and retail sectors while jobs were added in health care and food services.

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