WASHINGTON, March 6: The US economy haemorrhaged 651,000 jobs in February as the unemployment rate surged to a 25-year high of 8.1 per cent, according to official data on Friday tracking an ever-deepening recession.

The number of non-farm job losses in the Labour Department report was in line with most forecasts but underscored the dire state of the economy as companies axe jobs to cope with an intensifying slump.

The department also revised upward its estimates for losses for the previous two months -- 655,000 in January from 598,000, and 681,000 in December from 577,000. The figures made December’s losses the worst on record since October 1949, officials said.

The unemployment rate rose from 7.6 per cent in January to 8.1 in February, the highest since December 1983.“It’s ugly and always seems to be uglier than the previous month,” said Robert MacIntosh, chief economist at investment firm Eaton Vance. “It’s a deep and dark recession.”

MacIntosh said the report suggests a long road to recovery for the recession-ravaged economy.

“I think you have to go into 2010 to actually start to see growth,” he said.

He added that unemployment “is a lagging indicator so it will keep getting worse even if the economy has turned.”

President Barack Obama said the “astounding” figures would cause him to redouble efforts to promote economic recovery.

“This country has never responded to a crisis by sitting on the sidelines and hoping for the best,” Obama said in Columbus, Ohio.

“We have a responsibility to act, and that’s what I intend to do as president.”

The jobs report underscores the challenges facing Obama’s administration in stabilising a teetering financial system and pulling the shrinking economy out of a second year of recession.

Based on the most recent government estimate, US gross domestic product contracted at an eye-popping 6.2 per cent pace in the fourth quarter of 2008, and some analysts say the downturn may be even worse in the first quarter of 2009.—AFP
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