Sat 7 Feb 2009
The United States lost almost 600,000 jobs last month and the unemployment rate rose to 7.6 per cent, its highest level in more than 16 years, the Labor Department said on Friday.
It was the biggest monthly job loss since the economy tipped into a recession more than a year ago, and it was even worse than most forecasters had been predicting.
In addition, the Government revised down its estimates for previous months by 4,00,000. For December, the Government revised the job loss to 5,77,000 compared with an initial reading of 5,24,000. Overall, it said, the nation has lost 3.6 million jobs since it slipped into a recession in December 2007.
“Businesses are panicked and fighting for survival and slashing their payrolls,” said Mark Zandi, chief economist at Moody’s Economy.com. “I think we’re trapped in a very adverse, self-reinforcing cycle. The downturn is intensifying, and likely to intensify further unless policy makers respond aggressively.”
As in previous months, employers in January slashed their payrolls in almost every industry except healthcare. Manufacturers eliminated 2,07,000 jobs, more than in any year since 1982. The construction industry eliminated 111,000 jobs. And retailers, who were wrapping up their worst holiday shopping season in years, eliminated 45,000 jobs.
One modest exception to the bad news was in workers’ wages, which have thus far not reflected the dramatic plunge in employment. Hour earnings edged up to $18.46, up five cents, and average weekly earnings climbed $614.72, up $1.67.
A bipartisan group of senators worked furiously in backroom negotiations on Thursday to cut the cost of the more than $920 billion economic stimulus plan. Senate Democratic leaders said they would await outcome of those talks before pushing for a final vote on the measure.
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