US: 17,000 jobs lost in January

WSWS reports:

Some 17,000 jobs were wiped out in the US last month, according to nonfarm payroll figures released Friday by the Labor department. Analysts were expecting a reported increase of 70,000 jobs in January, and the unexpectedly low figure indicates that problems arising in the housing and financial sectors are spreading to other sections of the economy, including retail and manufacturing. It was the first month of negative job growth since 2003.

The Labor Department report indicates that jobs were eliminated in the construction, manufacturing, and government sectors, while job growth continued, albeit at a reduced pace, in the service and retail sectors. Professional service jobs - including those in finance, banking, and real estate, fell by 11,000, due largely to slowdowns arising from the collapse of the housing bubble and consequent losses in the financial sector.

Eighteen-thousand government jobs were cut in January, largely in response to falling property values and the ensuing decrease in tax revenues. The report notes that the number of jobs in the state-level education sector fell by 26,000 last month. In the retail sector, apparel stores lost over 9,000 jobs, and department stores also reported decreases in employment.

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The Federal Reserve cut interest rates by .5 percent at its regular meeting on Wednesday, following an emergency .75 percent cut last week. This brings the total reduction to the federal funds rate since September to 2.25 percent. In concurrence with the Federal Reserve, Congress and the White House have been putting together a $150 billion fiscal stimulus package. Both of these measures aim to avert negative growth in the short term, but as ominous economic indicators pile up, it is becoming increasingly unlikely that these actions will have a significant impact on the slide into recession.