Employers across the United States slashed payrolls for the second straight month, according to a federal report that served as the latest sign of an economic slowdown so worrisome that President Bush called an impromptu news conference to comment on the news and calm the nation’s fears.

“Losing a job is painful,” Bush told the White House press corps Friday after the Labor Department reported the biggest payroll cuts in five years. “I know this is a difficult time for our economy.

“But we recognized the problem early and we provided the economy with a booster shot,” said Bush, referring to the recent federal economic stimulus package.

Employers cut 63,000 nonfarm jobs in February, the department said. There was a loss of 22,000 jobs in January. February’s loss was the steepest one-month decline since March 2003, when payrolls plunged by 108,000. The last time the job count fell two months in a row was May and June 2003.

The negative report renewed speculation that the nation is either in or heading into a recession. The Associated Press reported that the Federal Reserve is expected to cut its benchmark interest rate by as much as three-quarters of a percentage point and that the cut might even come before the board’s next meeting on March 20 and 21. Any such action would follow the cuts of 1.25 percentage points the Fed made in January - the sharpest one-month reduction in 25 years.

“It’s not a good picture and it’s only going to get worse,” said Ed Kashmarek, an economist for Wells Fargo.

Labor economist James Sherk with the Heritage Foundation, a Capitol Hill think-tank that generally supports Bush administration policies, acknowledged that the payroll jobs numbers were bad but noted that the unemployment rate - which is computed separately - actually fell from 4.9 percent in January to 4.8 percent last month.

Sherk noted that unemployment remains below 5 percent, “which economists have considered full employment for many years.”

How can the unemployment rate drop when payroll counts are tumbling? It has to do with how the Labor Department has traditionally calculated these two different numbers.

The payroll count comes from a survey of employers who report how many people they have on the books. The unemployment number comes from a separate survey of households. People are asked who is working - counting the self-employed and others missed in the payroll survey - and who is looking but hasn’t found work.

In recent years, there has been a continuing - and often partisan - debate over which indicator is best, especially as more people hang out their own shingles and become self-employed.

But Wells Fargo’s Kashmarek said that right now that argument is irrelevant because both reports show a sharp drop in job growth. Since 1960, both measures - payroll jobs and household jobs - have averaged year-over-year growth of about 2 percent. In March 2006, both indicators hugged the historical trend with year-over-year growth just a bit above 2 percent. Friday’s report showed that both job meters have moved toward the red. Payrolls grew year-over-year by a little over half a percent. The household report was essentially flat.

“The trend line for employment growth has decelerated quite quickly,” Kashmarek said.

Why? The mortgage meltdown and the housing slump are the most obvious candidates.

“The bursting of the housing bubble has set loose a chain of events that are now infecting the job market,” said Jared Bernstein with the Economic Policy Institute in Washington.

Dow index drops nearly 147 points on bad employment news, bringing a two-day slide to 361. C2

E-mail Tom Abate at tabate@sfchronicle.com.

October 11, 2007 — Chrysler reached a tentative agreement with the United Auto Workers union yesterday after a tough negotiating stance taken by Cerberus Capital Management - the hedge fund giant that now owns the nation’s third-largest carmaker - sent the union into an hours-long strike.

Thousands of workers walked off the job yesterday around 11 a.m. at all but five of Chrysler’s UAW-represented plants. Six hours later, the UAW announced it had a tentative deal and workers would return to work today.

In a statement, the union said the agreement “protects jobs for our communities and also protects wages, pensions, and health care for our active and retired members.” Actual details of the agreement are being withheld pending ratification votes by Chrysler’s UAW members.

New York-based Cerberus, which bought the nation’s third-largest automaker from its German parent in August for $7.4 billion, had been working behind-the-scenes with Chrysler President Tom LaSorda, who is negotiating directly with UAW President Ron Gettelfinger in Las Vegas, sources said.

Chrysler’s new CEO Bob Nardelli, who was installed by Cerberus and is not known to be union friendly, had been frequently updated on the progress of the talks, as was Cerberus Chairman John Snow and founder Stephen Feinberg. Nardelli was scheduled to visit with Chrysler dealers yesterday in Las Vegas.

While estimates said Chrysler could lose up to $50 million a day from the strike, analysts believed Cerberus had the upper hand because they had enough inventory to go without workers for five weeks.

zachery.kouwe@nypost.com

(03-08) 04:00 PST Washington — The Federal Reserve is taking bigger steps to ease the nation’s credit crisis, including increasing the amount of loans it plans to make available to banks this month to $100 billion.

The Fed said Friday that it will boost the size of auctions planned for March 10 and March 24 to $50 billion each, up from the $30 billion limits it had announced previously. The auctions serve as short-term loans to get banks the cash they need to keep lending to their customers.

The Fed said it plans to continue the auctions for at least six months and will move to larger auction amounts if needed.

In a second step, the Fed said it will make $100 billion available through weekly 28-day repurchase agreements, where the central bank will lend cash in return for assets such as mortgage-backed bonds.

The Fed has been working to pump billions of dollars into the banking system to aid an economy rocked by the subprime mortgage crisis and the severe tightening of credit. The central bank started its new type of auction in December to provide short-term loans to cash-strapped banks in hopes of keeping them lending. So far, the Fed has made available $160 billion in short-term loans to banks through six auctions.

A meltdown in the housing and credit markets has made banks and other financial institutions reluctant to lend to each other, causing a cash crunch. Financial companies racked up multibillion-dollar losses as investments in mortgage-backed securities soured with the housing market’s bust. Problems first started in the market for subprime mortgages- those made to people with blemished credit histories. However, troubles have spread to other areas.