U.S. Loses Jobs For First Time In Five Years
Saturday, February 2, 2008
The nation shed jobs in January, the government reported yesterday, the first monthly loss since 2003, providing fresh evidence that the housing downturn and credit crisis have spread to the job market.
Economists have been counting on steady growth in wages and the number of jobs to keep American households afloat even as their homes become less valuable and the stock market slumps. The net loss of 17,000 jobs in January undermines that expectation, putting even more pressure on Congress to agree on a stimulus plan. Economists had forecast a gain of 70,000 jobs.
President Bush acknowledged the weakening economy. "There are certainly some troubling signs," Bush said yesterday in Kansas City, Mo. "There are serious signs that the economy is weakening, and that we've got to do something about it."
In his State of the Union Address on Monday, Bush said that the nation had added jobs for 52 consecutive months. He also said that there was "uncertainty" about the economy in the short term.
The unemployment rate was 4.9 percent in January, the Labor Department said, down from 5 percent in December, but still more than the November level of 4.7 percent. Job growth in December was stronger than previously reported, though it was still lower than the rate of job creation needed to match the growth in the labor force.
The January job growth figure will be revised next month as more complete data become available. Whatever that revision, there are clear signs that the labor market is the softest it has been in years. The number of claims for unemployment benefits has risen in recent weeks, and surveys show that increasing numbers of Americans say it is hard to find work. Companies cut back on hours for employees in January, and earnings for non-managers declined.
"There's no question the job market is slowing," said Roy G. Krause, chief executive of Spherion, one of the country's largest recruiting firms. He said conditions remain strong for those with advanced skills.
Democrats blamed the weak results on Bush. "Today's report that our economy actually lost jobs in January confirms my view that we are sliding into a second Bush recession," Sen. Hillary Rodham Clinton (D-N.Y.) said in a statement. Citing the new numbers, Clinton and rival Sen. Barack Obama (D-Ill.) called for the economic stimulus package to include an extension of unemployment insurance benefits, a request the Bush administration has rejected.
The steepest job losses were, as they have been for months, in construction, which shed 27,000 jobs, and manufacturing, which lost 28,000 jobs. Construction employers have cut 141,000 jobs in the past year, reflecting the sharp downturn in the housing sector.
The continued loss of manufacturing jobs occurred despite rising exports. Part of the weakness is tied to manufacturers who produce lumber and other goods used in home construction. Ongoing problems in the auto industry also contributed to the losses in manufacturing.
Banks and other financial institutions cut jobs, reflecting their ongoing financial woes, with a loss of 4,300 jobs in "credit intermediation" and related companies.
Before January, a broad range of service industries had been growing fast enough to more than make up the difference. Now, those industries are reporting either weak job growth or are shedding positions.