598,000 Jobs Lost as Jobless Rate Hit 7.6% in January
By EDMUND L. ANDREWS
WASHINGTON — The country moved into its second year of uninterrupted job losses last month, with companies shedding another 598,000 jobs and the unemployment rate moving up to 7.6 percent, the Labor Department reported on Friday.
Economists had forecast a loss of 540,000 jobs and a unemployment rate of 7.5 percent.
Job losses were once again spread across both manufacturing and service industries, reinforcing the picture of an economy that is contracting at its fastest pace in decades.
Employers in the United States have shed jobs every month since January 2008, for an aggregate decline in payroll employment of 3.2 million.
The Labor Department also revised its numbers from December, saying that the economy lost 577,000 jobs compared with an initial reading of a loss of 524,000.
Although the United States officially slipped into a recession in December 2007, the decline was erratic and temporarily disguised by the impact of the emergency tax rebate last spring. But since September, analysts say, economic activity has plunged on almost every front. Consumer spending started to decline in the summer, an extremely rare event in the United States, even in recession, and by September, almost every economic indicator had fallen sharply.
For the last several months, analysts said, the United States has increasingly been trapped in a vicious circle of slumping consumer demand, falling business investment, mounting losses in the banking system, and rising unemployment, which was 7.2 percent in December.
As a result, the monthly pace of job losses shot up to about 500,000 a month for the last three months of 2008. Economists see no hint that the bottom has been reached.
Most economic forecasters had been expecting a loss of roughly 500,000 jobs in January, at least as bad as in December, because other indicators of the job market had been trending down as well. Last week, the number of Americans filing first-time jobless claims reached a 26-year high, with 626,000 filling out initial applications.
Major retailers, rocked by one of the worst holiday shopping seasons in memory, have been shutting stores and laying of armies of workers in recent weeks. On Thursday, the nation’s retailers reported that sales fell 1.6 percent in January, the fourth consecutive month of steep sales declines.
And in sign that the country’s slowdown continues to reach beyond its borders, Canada, America’s largest trading partner, reported Friday that its unemployment rate jumped to 7.2 percent in January, from 6.7 percent in December.
In Washington, Friday’s gloomy job report put more pressure on Congress to pass an economic stimulus bill. The House passed a bill last week that would provide more than $800 billion in spending and tax cuts. In the Senate, still bogged down by objections from Republicans, lawmakers were hoping to be able to muster enough votes to pass a measure on Friday
For comparison, the unemployment rate was 4.9 percent in January 2008. But some analysts contend that the current unemployment rate understates the labor market’s problems because the percentage of adults participating in the labor force has slumped in recent years, and those people are not listed as “unemployed.”
Peter Morici, an economist at the University of Maryland, estimated that if the labor force participation rate today was as high as it was when President Bush took office, the unemployment rate would be 9.4 percent.
http://www.nytimes.com/2009/02/07/business/economy/07jobs.html?_r=1&hp=&pagewanted=print
By EDMUND L. ANDREWS
WASHINGTON — The country moved into its second year of uninterrupted job losses last month, with companies shedding another 598,000 jobs and the unemployment rate moving up to 7.6 percent, the Labor Department reported on Friday.
Economists had forecast a loss of 540,000 jobs and a unemployment rate of 7.5 percent.
Job losses were once again spread across both manufacturing and service industries, reinforcing the picture of an economy that is contracting at its fastest pace in decades.
Employers in the United States have shed jobs every month since January 2008, for an aggregate decline in payroll employment of 3.2 million.
The Labor Department also revised its numbers from December, saying that the economy lost 577,000 jobs compared with an initial reading of a loss of 524,000.
Although the United States officially slipped into a recession in December 2007, the decline was erratic and temporarily disguised by the impact of the emergency tax rebate last spring. But since September, analysts say, economic activity has plunged on almost every front. Consumer spending started to decline in the summer, an extremely rare event in the United States, even in recession, and by September, almost every economic indicator had fallen sharply.
For the last several months, analysts said, the United States has increasingly been trapped in a vicious circle of slumping consumer demand, falling business investment, mounting losses in the banking system, and rising unemployment, which was 7.2 percent in December.
As a result, the monthly pace of job losses shot up to about 500,000 a month for the last three months of 2008. Economists see no hint that the bottom has been reached.
Most economic forecasters had been expecting a loss of roughly 500,000 jobs in January, at least as bad as in December, because other indicators of the job market had been trending down as well. Last week, the number of Americans filing first-time jobless claims reached a 26-year high, with 626,000 filling out initial applications.
Major retailers, rocked by one of the worst holiday shopping seasons in memory, have been shutting stores and laying of armies of workers in recent weeks. On Thursday, the nation’s retailers reported that sales fell 1.6 percent in January, the fourth consecutive month of steep sales declines.
And in sign that the country’s slowdown continues to reach beyond its borders, Canada, America’s largest trading partner, reported Friday that its unemployment rate jumped to 7.2 percent in January, from 6.7 percent in December.
In Washington, Friday’s gloomy job report put more pressure on Congress to pass an economic stimulus bill. The House passed a bill last week that would provide more than $800 billion in spending and tax cuts. In the Senate, still bogged down by objections from Republicans, lawmakers were hoping to be able to muster enough votes to pass a measure on Friday
For comparison, the unemployment rate was 4.9 percent in January 2008. But some analysts contend that the current unemployment rate understates the labor market’s problems because the percentage of adults participating in the labor force has slumped in recent years, and those people are not listed as “unemployed.”
Peter Morici, an economist at the University of Maryland, estimated that if the labor force participation rate today was as high as it was when President Bush took office, the unemployment rate would be 9.4 percent.
http://www.nytimes.com/2009/02/07/business/economy/07jobs.html?_r=1&hp=&pagewanted=print
