Jobless Rate 7.6%; Most Job Cuts Since '74
Recession-battered employers eliminated 598,000 jobs in January, the most since the end of 1974, and catapulted the unemployment rate to 7.6 percent. The grim figures were further proof that the nation's job climate is deteriorating at an alarming clip with no end in sight.
The Labor Department's report, released Friday, showed the terrible toll the drawn-out recession is having on workers and companies. It also puts even more pressure on Congress and President Barack Obama's administration to revive the economy through a stimulus package and a revamped financial bailout plan, both of which are nearing completion.
Mr. Obama decried as "inexcusable and irresponsible" the delay of his economic recovery legislation in Congress with an estimated 3.6 million Americans losing their jobs since the recession began in December 2007. About half of them have lost jobs in only the past three months.
However, late Friday, key senators and the White House reached tentative agreement on the economic stimulus measure.
Before the tentative deal was reached, Mr. Obama acknowledged the stimulus plan was not perfect and pledged to work with lawmakers to refine the measure, which he called "absolutely necessary."
"These numbers demand action. It is time for Congress to act," Mr. Obama said bluntly. "That's 3.6 million Americans who need our help."
According to a new CBS News poll, Americans are more concerned about losing their jobs than at any point in more than a decade. Forty-four percent are very concerned that they or someone in their household will be laid off and on the job market sometime in the next twelve months. That's an increase of 14 points from last month and the highest number since CBS News began asking the question in 1996. Another 28 percent are somewhat concerned about losing their job.
Many Americans have been forced to make a career change, reports CBS News correspondent Anthony Mason. In Sacramento, Calif., Isaac Tisdale, a laid off construction worker, cashed out $6,000 from his 401(k) to pay for barber school tuition. He hopes to open his own shop.
"You are never going to get anywhere unless you invest in yourself," Tisdale told Mason.
Many economists said job losses for February are likely to be just as bad, and they don't expect the labor market to return to decent health until 2011 at the earliest.
For January, the net total of job losses was far worse than the 524,000 that economists expected. Job reductions in November and December also were deeper than previously reported.
With cost-cutting employers in no mood to hire, the unemployment rate bolted to 7.6 percent in January, the highest since September 1992. The increase in the jobless rate from 7.2 percent in December also was worse than the 7.5 percent rate economists expected.
Vanishing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, which has required companies to pull back. It's a vicious cycle where the economy's problems feed on each other, perpetuating a downward spiral.
"Companies are in survival mode and are really cutting to the bone," said economist Ken Mayland, president of ClearView Economics. "They are cutting and cutting hard now out of fear of an uncertain future."
If part-time employees, discouraged workers and others are factored in, the unemployment rate would have been 13.9 percent in January, the highest on record.
But on Wall Street, investors pushed up stock prices on hopes that the miserable jobs report would get Congress to move quickly on the economic revival package. The Dow Jones industrials gained about 190 points in late-afternoon trading and broader stock indicators also rose.
Factories slashed 207,000 jobs in January, the largest one-month drop since October 1982, partly reflecting heavy losses at plants making autos and related parts. Construction companies got rid of 111,000 jobs. Professional and business services chopped 121,000 positions. Retailers eliminated 45,000 jobs. Leisure and hospitality axed 28,000 slots.
Those reductions swamped employment gains in education and health services, as well as in the government.
Employers are slashing payrolls and turning to other ways to cut costs - including trimming workers' hours, freezing wages or cutting pay - to cope with shrinking appetites from customers in the U.S. and overseas, who are struggling with their own economic troubles.
The average work week in January stayed at 33.3 hours, matching the record low set in December.
With no place to go, the number of unemployed workers climbed to 11.6 million. In addition, 7.8 million people were working part time - a category that includes those who would like to work full time but whose hours were cut back, or those who were unable to find full-time work.
For example, more than 200,000 state government employees were expected to stay home without pay Friday in California, which began its first-ever furlough to save money during the ongoing fiscal crisis.
Job hunters also are facing longer searches for work.
The average time it took for an unemployed person to find any job - full or part time - rose to 19.8 weeks in January, compared with 17.5 weeks a year ago, underscoring the increasing difficulty the out-of-work are having in finding a new job.
Workers with jobs saw modest wage gains.
Average hourly earnings rose to $18.46 in January, up 0.3 percent from the previous month. Over the year, wages have risen 3.9 percent.
An avalanche of layoffs is slamming the nation from a wide swath of employers.
Caterpillar Inc., Pfizer Inc., Microsoft Corp., Estee Lauder Cos., Time Warner Cable Inc., and Sprint Nextel Corp. are among the companies slicing payrolls. Manufacturers - especially car makers - construction companies and retailers have been particularly hard hit by the recession. Talbots Inc., Liz Claiborne Inc., Macy's Inc. and Home Depot Inc. are all cutting jobs. So are Detroit's General Motors Corp. and Ford Motor Co.
For all of 2008, the economy lost a net total of 2.9 million jobs, according to revised figures. That marked the biggest annual loss on record and was worse than the 2.6 million initially estimated last month.
Americans cut back sharply on spending at the end of last year, thrusting the economy into its worst backslide in a quarter-century. The tailspin could well accelerate in the current January-March quarter to a rate of 5 percent or more as the recession drags on into a second year, and consumers and businesses burrow deeper.
Many economists predict the current quarter - in terms of lost economic growth - will be the worst of the recession.
With fallout from the housing, credit and financial crises - the worst since the 1930s - ripping through the economy, analysts predict 3 million or more jobs will vanish this year even if lawmakers quickly approve Mr. Obama's stimulus plan.
Mr. Obama has repeatedly pressed Congress to swiftly enact a package of increased government spending, including big public works projects and tax cuts, to revive the economy and create jobs. He says his plan will save or create more than 3 million jobs in the next two years.
But the recession has proven stubborn. Despite record low interest rates ordered by the Federal Reserve and a raft of radical programs, including a $700 billion financial bailout, consumers and businesses face high hurdles to borrow money. Foreclosures are skyrocketing, home prices are sinking and Wall Street remains on edge.
© 2009 CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report. The Labor Department's report, released Friday, showed the terrible toll the drawn-out recession is having on workers and companies. It also puts even more pressure on Congress and President Barack Obama's administration to revive the economy through a stimulus package and a revamped financial bailout plan, both of which are nearing completion.
Mr. Obama decried as "inexcusable and irresponsible" the delay of his economic recovery legislation in Congress with an estimated 3.6 million Americans losing their jobs since the recession began in December 2007. About half of them have lost jobs in only the past three months.
However, late Friday, key senators and the White House reached tentative agreement on the economic stimulus measure.
Before the tentative deal was reached, Mr. Obama acknowledged the stimulus plan was not perfect and pledged to work with lawmakers to refine the measure, which he called "absolutely necessary."
"These numbers demand action. It is time for Congress to act," Mr. Obama said bluntly. "That's 3.6 million Americans who need our help."
According to a new CBS News poll, Americans are more concerned about losing their jobs than at any point in more than a decade. Forty-four percent are very concerned that they or someone in their household will be laid off and on the job market sometime in the next twelve months. That's an increase of 14 points from last month and the highest number since CBS News began asking the question in 1996. Another 28 percent are somewhat concerned about losing their job.
Many Americans have been forced to make a career change, reports CBS News correspondent Anthony Mason. In Sacramento, Calif., Isaac Tisdale, a laid off construction worker, cashed out $6,000 from his 401(k) to pay for barber school tuition. He hopes to open his own shop.
"You are never going to get anywhere unless you invest in yourself," Tisdale told Mason.
Many economists said job losses for February are likely to be just as bad, and they don't expect the labor market to return to decent health until 2011 at the earliest.
For January, the net total of job losses was far worse than the 524,000 that economists expected. Job reductions in November and December also were deeper than previously reported.
With cost-cutting employers in no mood to hire, the unemployment rate bolted to 7.6 percent in January, the highest since September 1992. The increase in the jobless rate from 7.2 percent in December also was worse than the 7.5 percent rate economists expected.
Vanishing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, which has required companies to pull back. It's a vicious cycle where the economy's problems feed on each other, perpetuating a downward spiral.
"Companies are in survival mode and are really cutting to the bone," said economist Ken Mayland, president of ClearView Economics. "They are cutting and cutting hard now out of fear of an uncertain future."
(CBS/U.S. Department of Labor)
But on Wall Street, investors pushed up stock prices on hopes that the miserable jobs report would get Congress to move quickly on the economic revival package. The Dow Jones industrials gained about 190 points in late-afternoon trading and broader stock indicators also rose.
Factories slashed 207,000 jobs in January, the largest one-month drop since October 1982, partly reflecting heavy losses at plants making autos and related parts. Construction companies got rid of 111,000 jobs. Professional and business services chopped 121,000 positions. Retailers eliminated 45,000 jobs. Leisure and hospitality axed 28,000 slots.
Those reductions swamped employment gains in education and health services, as well as in the government.
Employers are slashing payrolls and turning to other ways to cut costs - including trimming workers' hours, freezing wages or cutting pay - to cope with shrinking appetites from customers in the U.S. and overseas, who are struggling with their own economic troubles.
The average work week in January stayed at 33.3 hours, matching the record low set in December.
With no place to go, the number of unemployed workers climbed to 11.6 million. In addition, 7.8 million people were working part time - a category that includes those who would like to work full time but whose hours were cut back, or those who were unable to find full-time work.
For example, more than 200,000 state government employees were expected to stay home without pay Friday in California, which began its first-ever furlough to save money during the ongoing fiscal crisis.
Job hunters also are facing longer searches for work.
The average time it took for an unemployed person to find any job - full or part time - rose to 19.8 weeks in January, compared with 17.5 weeks a year ago, underscoring the increasing difficulty the out-of-work are having in finding a new job.
Workers with jobs saw modest wage gains.
Average hourly earnings rose to $18.46 in January, up 0.3 percent from the previous month. Over the year, wages have risen 3.9 percent.
An avalanche of layoffs is slamming the nation from a wide swath of employers.
Caterpillar Inc., Pfizer Inc., Microsoft Corp., Estee Lauder Cos., Time Warner Cable Inc., and Sprint Nextel Corp. are among the companies slicing payrolls. Manufacturers - especially car makers - construction companies and retailers have been particularly hard hit by the recession. Talbots Inc., Liz Claiborne Inc., Macy's Inc. and Home Depot Inc. are all cutting jobs. So are Detroit's General Motors Corp. and Ford Motor Co.
For all of 2008, the economy lost a net total of 2.9 million jobs, according to revised figures. That marked the biggest annual loss on record and was worse than the 2.6 million initially estimated last month.
Americans cut back sharply on spending at the end of last year, thrusting the economy into its worst backslide in a quarter-century. The tailspin could well accelerate in the current January-March quarter to a rate of 5 percent or more as the recession drags on into a second year, and consumers and businesses burrow deeper.
Many economists predict the current quarter - in terms of lost economic growth - will be the worst of the recession.
With fallout from the housing, credit and financial crises - the worst since the 1930s - ripping through the economy, analysts predict 3 million or more jobs will vanish this year even if lawmakers quickly approve Mr. Obama's stimulus plan.
Mr. Obama has repeatedly pressed Congress to swiftly enact a package of increased government spending, including big public works projects and tax cuts, to revive the economy and create jobs. He says his plan will save or create more than 3 million jobs in the next two years.
But the recession has proven stubborn. Despite record low interest rates ordered by the Federal Reserve and a raft of radical programs, including a $700 billion financial bailout, consumers and businesses face high hurdles to borrow money. Foreclosures are skyrocketing, home prices are sinking and Wall Street remains on edge.
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I think it''s safe to expect more of that with her as Secretary of State. I fail to see how Republicans have anything to do with Congress allowing our corporations to go overseas and make billions and avoid our corporate taxes. Walmart is Clinton country. It''s nice to see Ford popping up the new Ford Fiesta factories in Mexico. Maybe if they made one in the US I''d buy it...but I''d rather buy a Toyota or Hyundai made in the US by American workers.
Posted by cydygitt1
=================
BUT NOOOOOO TARIFFS ARE SO BAAAAAAD!
Stupid stupid stupid stupid
Posted by repo_man_08
=================
OK bigmouth, explain to us all why the tariffs of 1930 known as the Smoot-Hawley Tariff Act, didn''t act as the catalyst for the Great Depression, and why you "think" we should enact more tariffs today after giving corporate America the freedom to offshore jobs and factories.
Posted by cydygitt1 at 01:27 PM : Feb 07, 2009
Meanwhile, on the other board someone is advocating TOTAL NATIONALIZATION OF THE BANKS, and nobody is raising an objection to THAT.
BUT NOOOOOO TARIFFS ARE SO BAAAAAAD!
Stupid stupid stupid stupid
On all Imports---
A modest Import Duty would level the playing field
And help the Govt. increase Revenue
Posted by windmaster12
==================
You might want to re-visit the history of the Smoot-Hawley Tariff Act of 1930 (2 republiCONS BTW) that over 1,000 economists signed a petition against!
The Smoot-Hawley Tariff Act (sometimes known as the Hawley-Smoot Tariff Act) was an act signed into law on June 17, 1930, that raised U.S. tariffs on over 20,000 imported goods to record levels. In the United States 1,028 economists signed a petition against this legislation, and after it was passed, many countries retaliated with their own increased tariffs on U.S. goods, and American exports and imports plunged by more than half. In the opinion of some economists, the Smoot-Hawley Act was a catalyst for the severe reduction in U.S.-European trade from its high in 1929 to its depressed levels of 1932 that accompanied the start of the Great Depression.
http://en.wikipedia.org/wiki/Smoot-Hawley_Tariff_Act
When?
Posted by whitemale09
=================
NEVER! The delusional neoCONS will always support the destruction of the middle class and vote against their best interests as they cling to their guns and clutch their story book of fairy tales!
Employers Slash 598,000 Jobs In January; 3.6 Million Jobs Lost Since Recession Began
This is all clearly Obama''''s fault.
Posted by hillaryin016
===================
Obviously another delusional neoCON bushevik that cannot understand normal thinking, since this bush/cheney recession began over a year ago in Dec. 2007, and Obama was handed a $1.2 Trillion budget DEFICIT and the bush DEPRESSION only 2 weeks ago!
Only a delsuional partisan republiCON could hang this bush DEPRESSION through "trickle-down" insanity on President Obama. Time for open season on neoCONS!
When George Bush came into power the DOW was almost 12,000 and when he left it was 7900 or what it was before Bill Clinton took office.
So folks the Nixon/Ford/Reagan/Bush I/Bush II/Hannity/Limbaugh-depression goes on and on and on.
May we as Americans ever be stupid enough to put another Republican in the White House!
Posted by whitemale09
=================
Yes, historically the DJIA gains have always been better -- almost double -- with the Dems in the WH compared to the rethugs.
The DJIA was at 3300 in Jan. 1993 when Clinton was sworn in and increased 229% during the next 8 years --a phenomenal rise during the longest economic expansion in our history. The DJIA was at 10,800 in Jan. 2001 when the bush/cheney scourge stole the WH for the neoCONS, and a dismal 8,000 (or a loss of 26%) when President Obama gave us HOPE in Jan. 2009.
The "trickle-down" raygunomics that the GOP keeps pushing on America, no matter how many times it is thoroughly debunked, has only helped the wealthy and corporate elite to gain more power and destroy the middle class!
Posted by JetRanger7
================
This is so true, corporate America with their corporate media mouthpiece and paid lobbyists control ALL of Washington and are completely running our great nation right into the ground and bankrupt!
The wealthy and corporate elite own ALL the corrupt lobbyists that have only passed legislation for their GREED and insatiable profits all at the expense of the middle and working class Americans. Unfettered capitalism has been shown to be the worse scourge on America and the world now through the global market.
A major problem not addressed in all this banter
Is the fact that the US is no longer
The Manufacturing engine of the world--
We have ceded that to China, Germany, and others!!!
This is not a Dem- Lib or Gop- Conservative problem
It is a Worldwide Shift--
We are Sending our Cash away for disposable goods
In Shiploads--
Our leaders - and all of us need to see that
Fake Free Trade has made us a debtor Nation---
Other Countries subsidize their exports to us
And Manipulate their currencies
Giving an unfair advantage to their manufacturing--
We need to recognize this and Impose Tariffs
On all Imports---
A modest Import Duty would level the playing field
And help the Govt. increase Revenue
Much of our Manufacturing is gone
Probably not to return for years
Face the Reality -- If we keep sending away
All our Cash
We will soon be a Third World Country
Wake up Gop and Dems and Pull out of Nafta--
Free Trade is a big Lie benefiting Producer Nations
Consumers nations like us only become poorer--
We need to change course fast !!!