Obama vows to break cycle of job losses

updated 7:37 p.m. ET March 6, 2009

WASHINGTON - President Barack Obama pledged Friday to break the cycle of job losses that have led to an 8.1 percent unemployment rate and 4.4 million jobs shed since the recession began.

Addressing a graduating class of new police officers in Ohio, the president talked about Friday's grim government report that showed the nation's unemployment rate bolted to the highest since late 1983 in February as cost-cutting employers slashed 651,000 jobs.

"We have a responsibility to act and that's what I intend to do as the president of the United States of America," he said, defending his $787 billion economic stimulus package.

Obama noted the many critics of the package, but he said government leaders have a responsibility to act for future generations. The United States has met every challenge with bold action and big ideas, he said, and "that's what fueled a shared and lasting prosperity."

The unemployment figure and job losses were worse than analysts expected and the Labor Department's report showed America's workers being clobbered by a relentless wave of layoffs.

The net loss of jobs in February came after even deeper payroll reductions in the prior two months, according to revised figures. The economy lost 681,000 jobs in December and another 655,000 in January.

Since the recession began in December 2007, the economy has lost 4.4 million jobs, more than half of which occurred in the past four months.

"There is no light at the end of the tunnel with these numbers," said Nigel Gault, economist at IHS Global Insight. "Job losses were everywhere and there's no hope for a turnaround any time soon."

Labor Secretary Hilda Solis said the Obama administration is moving aggressively to jump start job creation. She noted that the president's stimulus package increased unemployment insurance benefits and under the plan, the department was making more than $3.5 billion available for education, training and re-employment services.

Video   Jobs report dissected March 6: Experts on CNBC dissect the February jobs report, which showed the U.S. economy lost 651,000 jobs as the unemployment rate jumped to 8.1 percent. CNBC

Employers are shrinking their work forces at alarming clip and are turning to other ways to slash costs — including trimming workers' hours, freezing wages or cutting pay — because the recession has eaten into their sales and profits. Customers at home and abroad are cutting back as other countries cope with their own economic problems.

With employers showing no appetite to hire, the unemployment jumped to 8.1 percent from 7.6 percent in January. That was the highest since December 1983, when the jobless rate was 8.3 percent.

All told, the number of unemployed people climbed to 12.5 million. In addition, the number of people forced to work part time for "economic reasons" rose by a sharp 787,000 to 8.6 million. That's people who would like to work full time but whose hours were cut back or were unable to find full-time work.

Meanwhile, the average work week in February stayed at 33.3 hours, matching the record low set in December.

Job losses were widespread in February.

Construction companies eliminated 104,000 jobs. Factories axed 168,000. Retailers cut nearly 40,000. Professional and business services got rid of 180,000, with 78,000 jobs lost at temporary-help agencies. Financial companies reduced payrolls by 44,000. Leisure and hospitality firms chopped 33,000 positions.

The few areas spared: education and health services, as well as government, which boosted employment last month.

A new wave of layoffs hit this week. 

General Dynamics Corp. said Thursday it will lay off 1,200 workers due partly to plummeting sales of business and personal jets that forced it to cut production. Defense contractor Northrop Grumman Corp., and Tyco Electronics Ltd., which makes electronic components, undersea telecommunications systems and wireless equipment, also are trimming payrolls.

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