Recession-battered employers eliminated 598,000 jobs in January, the most since the end of 1974, and catapulted increasing the unemployment rate to 7.6 percent. The grim figures were further proof that the nation's job climate is deteriorating at an alarming clip with no end in sight.
The Labor Department's report, released Friday, showed the terrible toll the drawn-out recession is having on workers and companies. It also puts even more pressure on Congress and President Barack Obama's administration to try to revive the economy through a stimulus package and a revamped financial bailout plan, both of which are may be nearing completion.
The latest net total of job losses was far worse than the 524,000 that economists expected. Job reductions in November and December also were deeper than previously reported.
With cost-cutting employers in no mood to hire, the unemployment rate bolted increased to 7.6 percent in January, the highest since September 1992. The increase in the jobless rate from 7.2 percent in December also was worse than the 7.5 percent rate economists expected though the tenth of a percentage point difference could be treated as negligible.
All told, the economy has lost a staggering 3.6 million jobs since the recession began in December 2007. About half of this decline occurred in the past three months.
"Companies are in survival mode and are really cutting to the bone," said economist Ken Mayland, president of ClearView Economics. "They are cutting and cutting hard now out of fear of an uncertain future."
Factories slashed cut 207,000 jobs in January, the largest one-month drop since October 1982, partly reflecting heavy losses at plants making autos and related parts. Construction companies got rid of 111,000 jobs. Professional and business services chopped 121,000 positions. Retailers eliminated 45,000 jobs. Leisure and hospitality axed 28,000 slots.
Those reductions swamped employment gains in education and health services, as well as in the government but I won't bother telling you the size of these increases.
To repeat what was said a few paragraphs earlier in a trivially different way: Just in the 12 months ending January, an astonishing 3.5 million jobs have vanished, the most on record going back to 1939, although the total number of jobs has grown significantly since then which is just a confusing way of saying that as a percentage of the work force, it's nothing close to 1939.
Monday, February 9, 2009
Accuracy in Economic Reporting
In a recent post, Cafe Hayek's Russ Roberts corrects an AP article, and illustrates how bias can creep into supposedly "objective" reporting. Roberts strikes the hyperbolic language, and adds caveats (in bold) where needed: