Jobs In U.S. Unexpectedly Drop, Bolstering View Economy Is In A Recession (Shobhana Chandra)

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March 7 (Bloomberg) -- The United States unexpectedly lost jobs in February for the second consecutive month, adding to evidence the economy is in a recession.

Payrolls fell 63,000, the most in five years, after a revised decline of 22,000 in January, the Labor Department said today in Washington. The jobless rate declined to 4.8 percent, reflecting a shrinking labor force as some people gave up looking for work.

``All the lights are flashing red,'' said Nariman Behravesh, chief economist at Global Insight Inc. in Lexington, Massachusetts, in an interview with Bloomberg Television. ``We're in a recession. I don't think there is any doubt about it at this point.''

Treasury notes soared after the report on concern that the weakening labor market, combined with lower home prices, higher fuel bills and a global credit squeeze will force consumers to further reduce spending. Minutes before the figures were released, the Fed said it will expand two short-term auctions this month to $100 billion to address ``heightened liquidity pressures'' in markets.

Traders now anticipate Fed Chairman Ben S. Bernanke and his team will cut their benchmark interest rate by at least three quarters of a percentage point at or before their March 18 meeting.