The nonfarm payrolls for the months of February showed that the economy has lost 63 thousand jobs, the largest drop since March of 2003, from the previous month when they were originally reported as down -17 thousand it was further revised down to a shed of 22 thousand jobs; while December's created jobs were also revised down to almost a half to 41 thousands from 82,000 reported.

Lost jobs came much worse than median estimates that suggested a sluggish rise of 30 thousand jobs to have been created in the economy during the past month.

Meanwhile the households survey, which is known as the national unemployment rate shrunk to 4.8% which was rather at first sight a drastic surprise as it was expected to rise back to December's rate of 5.0%; nevertheless as the news was digested the fall in unemployment rate was rather the result of shrinkage in the labor force itself, seemingly the economy is in a much worse condition within the boarders that we see which drove capable individuals to give up on finding a job causing a camouflaged drop in the headline rate.

Jobs were lost all across the industries, from manufacturing dropped 52,000 the largest since July 2003, retail sector which was the biggest drop in five years, goods producing, construction, and professional businesses, while modest jobs creation were seen by health and education, and the services sector which added only 26,000, while the government added 38,000 but not in a much added weight to offset the huge lost of jobs which is those added by the government were subtracted the private payroll shed marks 101,000 the largest drop since March 2003.

Average hourly earning came inline with expectations with a monthly gain of 0.3% which practically means nothing if Americans don’t already have a job to be paid for! Expenditure which accounts for 2/3 of the GDP will surely be flat in the first quarter as data until January suggesting spending was flat and today's data confirms the ongoing trend; so if the economy did not grow or even contracted in the first three months of this year is not a surprise, after growing a sluggish 0.6% in the fourth quarter of 2007.

The American economy is clearly in recession and the feds are cornered at this time, they have rising inflation from record commodity and food price, and also a depreciating dollar that is importing extra inflation. The dollar in the recent period has been on a daily basis retting fresh records low, and seems dollar selling in not yet at a halt.

The feds announced today that they will be expanding $100 billion tow short-term actions this month from $60 billion raising each to $50 billion from $30 billion. The tightened liquidity is still an ongoing problem in the economy after the housing market bubble burst resulted in a collapse to the subprime market. The TAF has already proven its failure in restoring liquidity in the market, as despite the amount that totals $160 billion since mid-December no improvement was at any level seen.

Market participants are now locking the possibility of 100 bp cut in the Fed's March 18 meeting; discarding by that Fed Fisher's comment that hinted markets should not expect the fed to follow extensive easing as they cut much in a short time frame which they can much longer pursue. But let's face it, what else are they to do the economy is clearly in its worst recession since decades and if some of you still mistake it as an economic slowdown think again, for we have already entered recession and if we are exiting at this stage its only to STAGFLATION and nothing else.