U.S. job losses accelerated in January as 598,000 were slashed, the most in 34 years, and the unemployment rate soared to a 16-year high, pressuring lawmakers to act quickly to counter a deepening recession.
"The economy is just falling into oblivion and it will get worse," said Greg Salvaggio, vice president for trading at Tempus Consulting in Washington. The Senate resumed debate less than two hours after report was issued on a package of measures to spur the economy that could cost $800 billion or more.
Democratic leaders were pushing for a vote later on Friday on stimulus measures.
Republican leaders branded the proposals as excessive and bound to drive up U.S. deficits but President Barack Obama wanted a speedy vote to meet the economic crisis head-on.
Last month’s job cuts were the most severe since December 1974, while the unemployment rate hit 7.6 percent, its highest level since September 1992. The jobless rate, which stood at a low 4.9 percent a year ago, has jumped a full percentage point over just the last three months.
HUMAN TOLL CITED
"Today’s grim job numbers underscore the human toll of our economic crisis and add to the overwhelming evidence for getting a recovery package to the President’s desk fast," said the chairman of the Congressional Joint Economic Committee, Democratic Rep. Carolyn Maloney of New York.
Private-sector analysts agreed on the need for some action to try to slow the relentless slide in job prospects.
"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 stimulus package)."
Stock prices were higher at midmorning on investor hopes that lawmakers will be jolted into moving forward with stimulus measures, rather than arguing whether tax cuts or spending measures would be the best way to boost activity.
U.S. Treasury debt securities prices fell in anticipation that a wave of government borrowing will be required to fund any new spending or make up for revenue losses from tax cuts.
U.S. Commissioner of Labor Statistics Keith Hall emphasized the degree the deterioration in labor markets has gathered steam as a U.S. recession wears on.
"January’s sharp drop in employment brings job losses to 3.6 million since the start of the recession in December 2007," Hall said in a statement, and "about half the decline occurred in the last three months."
MANUFACTURING SINKING
U.S. manufacturing 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 said.
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 that 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 we’re 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."
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