Jobs Dip by 17,000 in January
- Feb 01, 2008
In yet another sign of the economy’s struggles, U.S. employers cut 17,000 jobs from payrolls in January, marking the first monthly employment decline since August of 2003. There were, however a few bits of good news for the economy today, as December’s job creation figure was revised upward, to a gain of 82,000 jobs from its original reading of just 18,000 new jobs. And unemployment dipped slightly, from 5.0 percent in December to 4.9 percent last month. “(The figures were) certainly weaker than expected,” noted Ken McCarthy, managing director of New York area research for Cushman & Wakefield Inc, who noted that the general expectation was a gain of somewhere near 50,000 jobs in January. “The loss was largely because of continued decreases in manufacturing, which lost 28,000 jobs, and construction, which lost 27,000 jobs,” said McCarthy (pictured), who also noted that state government and education employment dropped by 26,000 jobs, which could prove to be a one-month anomaly. Still, it seems clear that the economy is certainly slowing. The Federal Reserve cited the sluggish job growth in recent months as one of the factors in its decision to cut interest rates twice in the past two weeks, and new job creation is one of the main goals of a $150 billion economic stimulus bill currently being pushed in Congress. McCarthy noted that, while the economy is definitely getting weaker, he was not yet ready to declare a recession. “A lot is going to depend on what happens with private businesses; do they begin laying people off? So far we haven’t seen that,” he said. The private sector added 1,000 new jobs in January, according to the Labor Department report. McCarthy also pointed out the strong upward revision of December’s figure, which he said could happen again for January. While the Fed is certain to make note of the latest report, the next scheduled interest rate meeting is not until March 18, by which time another employment report will have been issued, and January’s figures could be revised. “If we see further weaknesses in other economic indicators, such as the February jobs report, then clearly the Fed has indicated that they’ll continue easing (rates) to make sure the economy remains okay,” said McCarthy.