The Back Alley Archives

April 4 (Bloomberg) -- Employers in the U.S. cut the most workers in five years last month, raising concern that the economic contraction is deepening and adding to the case for the Federal Reserve to keep lowering interest rates.

Payrolls shrank by 80,000, more than forecast and the third monthly decline, the Labor Department said today in Washington. The jobless rate rose to 5.1 percent, the highest level since September 2005, from 4.8 percent.

``This is the final blow,'' said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. ``It's clear the U.S. economy is in a recession. That's going to shake the confidence of investors and companies across the world and cause people to curtail spending in other countries.''

April 5 (Bloomberg) -- The jump in March bankruptcy filings is another indication the U.S. economy is in recession, led by states where the housing boom turned to bust.

The more than 90,000 bankruptcy filings in March were the highest since insolvency laws became more restrictive in October 2005, according to statistics compiled from court records by Jupiter eSources LLC. At a daily rate, filings in March were 30 percent above the pace in 2007.

Rising bankruptcies, together with mounting foreclosures and fewer jobs, are further signs the biggest housing slump in a generation is hurting consumers and businesses. Federal Reserve Chairman Ben S. Bernanke this week for the first time acknowledged the economy may be facing a recession and vowed to act to cushion the slowdown.

``We're seeing fairly high readings in these measures of distress like bankruptcies, foreclosures and mortgage defaults,'' said Chris Low, chief U.S. economist at FTN Financial in New York. The most affected states are ``also where the most housing-related business growth was,'' said Low.

The states most affected by the housing recession, including California, Nevada and Florida, were among those with the largest increases in bankruptcies.