January employment data were unambiguously bad, clearly showing a deepening recession and marking the third month in a row when job losses totaled more than a half million.
Payrolls fell 598,000 in the biggest drop since December 1974 as the Bureau of Labor Statistics said job losses posted in the January report were “large and widespread.”
The civilian unemployment rate soared 0.4 point to 7.6%, a high since 1992, and the rise was across demographic groups. The labor force and participation dropped, also signs of recession.
Benchmarks and revisions dropped another 66,000 payroll jobs in November-December. Benchmarks also generally removed jobs in the spring and summer of 2008.
Jobs by category showed: manufacturing plunged 207,0000, construction fell 111,000, retail slid 45,100, leisure dropped 28,000, financial lost 42,000, and services declined 121,000, of which temporary help fell 76,000.
The only gains were government at plus-6,000 and education and health care at a 54,000 increase.
The one-month diffusion index was 25.3, and in a worrisome note, the Bureau of Labor Statistics said job losses were more widespread than in the previous recession.
Hours fell, reflecting decreases in manufacturing. This suggests production and incomes will fall.
The only anomaly in a very weak report is the trend-like up 0.3% reading for average hourly earnings, putting the increase at 3.9% rise over the year. Under most circumstances, a very weak economy would result in lower, not higher, wages.
Job losses now total 3.6 million since the recession began in December 2007. There are no signs of stabilization yet.
— Market News International