Economic numbers are worsening in the U.S.

The economic picture is deteriorating further in the United States, as unemployment is slumping into record lows and major U.S. industries are still struggling to remain above water. As a result, the Federal Reserve is expected to keep rates near 0 for most of 2009 and beyond, if growth will not pick up tangibly over the coming months. President Obama, in the mean time, outlined, is manifesto for the next fourth years: more taxation for the rich, a new green economy funded by the government, universal education and free healthcare. Obama’s project will mark an end to more than 20 years of Reagan policy, which started right after interest rates topped near 20% in 1980, and continued throughout the Bush administration. Savings should be the mantra for the future with the help of heavy government’s intervention, especially during hard times like the one we are currently experiencing. In February, the unemployment rate was above expectations and rose to 8.1% from 7.6% in January. Employment felt 651,000 on the top of January 655,000 and December 681,000. February’s decline was broadly based with the service production sector slumping 375,000.

The negative data is confirmed by the ISM manufacturing. It rose to 35.8 from 35.6, but stays very weak in most of its components. In effect, new orders fell to 33.1 from 33.2, while employment slid to 26.1 from 29.9, which represents the lowest level ever recorded. The ISM services moved instead down to 41.6 from 42.9. Here, again, most of the sectors are suffering, even though above historical lows. New orders declined to 40.7 and business activity slid to 40.2 from 44.2. Employment, at the contrary, rose to 37.3, though away from the benchmark of 50. In reality, there is not much to rely on at the moment with the exception of a slight improvement in personal spending, which represents 70% of the U.S. GDP. After six consecutive declines, it rose 0.6% in January following a decline of 1.0% in December, while personal income moved up 0.4% from -0.2% in December. However, U.S. construction spending, fell 3.3% in January (-1.5% expected) from -2.4% in December.