New data show a sharp 3.1 percent drop in jobs in February, compared to a year ago.  Annual job losses during recessions rarely exceed this rate, but I expect we'll see worse data soon. What happens with jobs in the next few months will tell us how long this recession will last. While job gains don't drive booms, job losses have an outsized effect on recessions, because fear of losing your job depresses the spending of ALL consumers.

A third of the job losses in the past year were directly due to the auto and housing busts. The rest come from a general slowdown in other sectors of the economy. Somewhat encouraging is that jobs in core food, clothing, and drug stores were down just 1.5 percent. Restaurant jobs also were down just 1.5 percent.

Jobs in the large health care sector increased 2.5 percent, and government jobs were up 0.6 percent.

The housing situation is still grim. We expect an 8 percent average drop in home prices during the next 12 months, but much of that is due to continuing large decreases in markets in Florida and California. Home construction is down 50 percent from last year.

Because easy credit fueled the boom that has now burst, it's not surprising that credit is in bad shape, with mortgage delinquencies at record levels. But delinquencies on commercial real estate, on credit cards, and on industrial loans are so far no worse than in previous recessions.