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.
The first week of the new month brings two of the most important economic indicators: the ISM index and the non-farm payrolls report. Both are expected to be very grim news.
Once the ISM -- and especially the new-orders component -- turns up decisively, the expansion is typically one to four months away, although in some cases it has turned up as much as a year before the end of a recession.
"February was the worst month yet," said Global Insight's Bethune and Gault, who are predicting payroll losses of 750,000 and an employment rate of 8%.
Others have a slightly less dire view, if a loss of 625,000 could be considered upbeat. "Our sense, admittedly based mostly on anecdotes, is that labor market conditions remain dismal but are not necessarily accelerating to the downside," wrote Stephen Stanley, chief economist for RBS Greenwich Capital.
Economists expect the number of hours worked to continue plunging as more workers are forced into part-time shifts. In January, 7.8 million workers wanted to work full time but could only get part-time work.
Worst since '49? Or since '45?
If the economy did shed 630,000 jobs in February as expected, it would be the third largest monthly loss on record, dating back to 1939.
The record was set in September 1945, when nearly 2 million people lost their jobs after the Allies won the most destructive war in history and industry was retooling for peacetime, sending "Rosie the Riveter" back to her knitting.
Another strike in July 1956 cost 629,000 jobs, but the next month saw 678,000 jobs regained.
If 630,000 jobs were lost in February, it would bring total losses in this recession to just over 3% of payrolls, close to the 3.1% lost in the recessions of 1982, 1954 and 1949 (excluding the strike). Next on the list: 4% in 1958 and 6.9% in 1945.
And remember: These forecasts assume the Federal Reserve will slowly be able to get credit flowing again, and that the recently approved fiscal stimulus will give a significant boost to the economy.
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