[FoRK] U.S. job losses accelerate
eugen at leitl.org
Fri Feb 6 06:34:36 PST 2009
(only the official figures, of course)
U.S. job losses accelerate Fri Feb 6, 2009 9:08am EST
By Glenn Somerville
WASHINGTON (Reuters) - U.S. employers slashed 598,000 jobs in January, the
deepest cut in payrolls in 34 years and the jobless rate shot up to 7.6
percent, according to a Labor Department report on Friday that underlined a
January's job losses were worse than the 525,000 that had been forecast by
Wall Street economists, who also had expected the unemployment rate to come
in lower at 7.5 percent. The bleak data is certain to be cited by the Obama
administration as a fresh reason for Congress to speed up debate over
economic stimulus proposals that could cost $800 billion or more.
Last month's job reductions were the largest since 602,000 in December 1974,
while the jobless rate reached its highest level in more than 16 years.
"The economy is just falling into oblivion and it will get worse," said Greg
Salvaggio, vice-president for trading at Tempus Consulting in Washington,
shortly after the jobs report was issued. Others agreed, saying it
intensifies pressure for the government to try something to prop up the
"These are huge, huge declines, said Nigel Gault, director of U.S. economic
research for Global Insight in Lexington, Mass. "Hopefully it will
concentrate some minds in the Senate so they can come to an agreement (on a
U.S. equity index futures rose after the data boosted expectations for
passage of the stimulus package. Long-dated U.S. government debt prices
extended losses on concern that the government will have to borrow huge
amounts to finance any stimulus measures.
Labor officials said job losses were gaining momentum.
"January's sharp drop in employment brings job losses to 3.6 million since
the start of the recession in December 2007," Commissioner of Labor
Statistics Keith Hall said in a statement, and "about half the decline
occurred in the last three months."
January's losses followed upwardly revised cuts of 577,000 in December and
597,000 in November.
The manufacturing sector bled jobs at the sharpest rate during January in
more than 26 years, shedding 207,000 workers after cutting 162,000 in
December. The last time more factory jobs were lost in a single month was in
October 1982 when 221,000 were cut. An index measuring total paid hours for
factory workers dropped to its lowest level since 1940, department officials
Construction industries dropped 111,000 jobs in January after 86,000 in
December and Hall said that pace of cuts was accelerating. Retail businesses
cut another 45,000 positions after shedding 82,700 in December.
There were 121,000 job losses among professional and business services
providers in January on top of 106,000 that were eliminated in December. Only
education and health services added jobs as did the government.
Analysts said there was no sign of relief on the horizon, judging from the
depth and breadth of January's labor market plunge.
"It is just another confirmation that were are in a deep and long recession,
and the bottom is not even in sight," said Robert MacIntosh, chief economist
for Eaton Vance Management in Boston. "Manufacturing is incredibly weak --
it's going to be a long haul."
(Reporting by Glenn Somerville; Editing by Neil Stempleman)
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