U.S. Economy Suffers Another Body Blow

Employers Cut 17,000 Jobs In January - First Such Reduction In More Than 4 Years

(CBS/AP)  Nervous employers cut 17,000 jobs in January - the first such reduction in more than four years and a fresh trouble sign that the U.S. economy is in danger of stalling.

The Labor Department's report, released Friday, also showed that the unemployment rate dipped slightly to 4.9 percent, from 5 percent, as the civilian labor force shrank slightly.

"It's very unusual for the economy to lose jobs, said Mark Zandi, chief economist at Moody's economy.com. "It only happens during recession," he told CBS News correspondent Anthony Mason. "So the fact that we lost jobs is very symbolic and suggests that the economy is in recession."

Job losses were widespread. Manufacturers, construction firms and a variety of professional and business services eliminated jobs in January - reflecting the toll of the housing and credit debacles. The government cut jobs, too. All those cuts swamped job gains in education, health care, retailing and elsewhere.

Wage growth also slowed, another indication that employers are tightening their belts amid the economic slowdown.

President Bush called Friday's negative job report "troubling," saying it ends a 52-month streak of job growth.

"Inflation's low. Productivity's high, but there are certainly some troubling signs, serious signs that the economy is weakening and that we've got to do something about it," Mr. Bush said.

He prodded Congress to pass an economic stimulus package that had been negotiated by House Democrats and Republicans but which is under the microscope in the Senate as members seek to expand the pool of Americans eligible for tax rebates and other economic relief.

Although the unemployment rate declined a notch, from 5 percent in December to 4.9 percent in January, the jobless rate - calculated from a different statistical survey than the payroll figures - dipped as people left the labor force for any number of reasons.

Taken together, the figures suggested that employers have grown cautious as they try to cope with fallout from housing and credit problems and rising worry about the ailing economy.

Mason spoke to one of those employers, Zachary Mottl, at Atlas Tool outside Chicago.

"We don't want to lay people off," Mottl told him. "We don't want to lay off the new guys we just hired - I care for their families. But if it slows down, you gotta make tough decisions."

Economists were predicting employers would boost payrolls by around 70,000, and that the unemployment rate would stay at 5 percent.

Fears of a recession have grown.

The White House and Congress are working to enact a package to stimulate the economy. And, the Federal Reserve has gotten much more aggressive - ordering two big interest rate reductions in just over a week.

A severely depressed housing market, hard-to-get credit, turbulence on Wall Street and "some softening in labor markets" were cited by the Fed, when it lowered rates by a bold half point on Wednesday.

The unemployment rate had shot up in December to 5 percent, from 4.7 percent in November. The magnitude of that increase - something not seen since right after the September 2001 terror attacks - sent off alarm bells. In the past, such a big increase in the jobless rate signaled the economy was starting a recession or already in one.

The health of the U.S. job market is a critical factor shaping how the overall economy fares. Until now, job and wage growth have helped cushion people from the negative forces coming from the housing bust and credit crunch. If companies continue to cut back on hiring and put a lid on wages, though, that will spell more trouble for the economy.

Workers saw wages grow at a slower pace last month.

Average hourly earnings for jobholders rose to $17.75 in January, a 0.2 percent increase from the previous month. Economists were predicting a slightly larger gain of 0.3 percent. Over the last 12 months wages went up by 3.7 percent. With high energy and food prices, though, workers may feel squeezed and feel like their paychecks aren't stretching that far.

The 17,000 drop was in total payrolls - both government and private employers - in January. The government sliced 18,000 positions, while private employers added just 1,000 jobs.

The drop in payrolls marked a significant deterioration in employment conditions. In December, employers added 82,000 new jobs. January's decline was the first since August 2003, when the labor market was still struggling to recover from the 2001 recession.

The government on Friday also released annual revisions - based on more complete information - to its payroll data. Those revisions showed job creation was even weaker last year than initially thought.

The economy added an average of just 95,000 jobs per month in 2007, versus an earlier estimate of 111,000 a month for the year. In 2006, payroll employment grew by an average of 175,000 a month.

Construction and factory workers have been especially hard hit by the meltdown in housing and other troubles in the economy.

In January, construction companies cut 27,000 jobs, with most of the decline concentrated in housing. The construction industry has lost a total of 284,000 jobs since its employment peak in September 2006.

Factories eliminated 28,000 positions in January, and have cut 269,000 jobs over the last 12 months.

The economy nearly stalled in the final three months of last year, and some economists believe it may actually be shrinking now.

Under one rough rule, the economy would have to contract for six months in a row for the country to be considered in a recession. The likelihood of a recession has risen sharply over the past year, and analysts increasingly believe the U.S. will be in one during the first half of 2008. The worry is that people and businesses will hunker down and pull back their spending, sending the economy into a tailspin.

[mcv57]

Why in the h*e*l*l does CBS still play on the public''s ignorance - blame the housing industry and credit scandel. These financial debacles were only the needle that burst the economic bubble.

Da*mN you CBS . . . if you are going to offer any intelligent journalism, speak fact not the corrupt government''s fiction. Companies are laying off people because there is NO WORK!!! Da*m*n politics and greed is going to kill people!!!

[cbs_oliver]

The figures put forward by the government and industries for employment and unemployment are highly suspect.

I''m not sure what meaning if any they have.

They certainly can''t be intelligently compared with labor/employment numbers in the US in the past or with foreign nations in the past or now.

It should be interested to see what the census says. Provided that isn''t screwed around with too.

[sgtrds]

This is why I say they should keep their rebate and use the money to extend unemployment benefits. Put the money into the hands of those that really need it. I mean sure I like getting my rebate (even though I''m just going to send it to the DNC), but I don''t need it and so many people have fallen off unemployment and they do.

[ov442]

what the heck is wrong with these writers?
The companies shed jobs NEVER because they are ''nervous'' what kind of rediculous statement is that?
They lay people off because business is bad period. If they dont need you they let you go.

Business is bad because so many americans have no equity in their homes, or no homes and are strapped for cash, maxed credit cards, or cant get one, or afraid to spend on it and rack up debt they may not be able to pay.
Wages for the major groups making less than 70K per year have remained mostly flat for 4 years.
While costs of living have SKyrocketed.
If you only get meager pay raises like 3% or less, for years while Gasline Triples, utilities at least Double, insurance Doubles, food increases 50% or more, what in the world do people think is happening? or going to happen to the economy?

[ov442]

Posted by SgtRDS .... good comments Sgt. You are a man of principle and values.

But i believe the senate version of this bill is both extending unemployment benefits and food aid as well as provide checks to the elderly, and those on social security that have low incomes and need it.
HOWEVER, it also appears the same people that feel the poor need help, have decided that the wealthy and well of need some Assistance as well. I wonder what people making over $150,000 a year ($12500/month) wow, will do with their 500 or 600 bucks? Ya think they''ll buy groceries, or pay their utility bilsl or keep their house from going into foreclosure, or possibly buy a nice 500.00 dinner out with champagne or wine.
excellent!

instead why dont the feds just give anyone making under 100,000 as a household the rebates, and anyone making over that, a few free breakfast meals from McDonald''s.

[missingamerica]

Two things:

First, the market is still relatively stable even though America''s economy has enough signs of weakness that they can no longer be glossed over, demonstrating the increasing disconnect between the DOW etc. and America''s true economy.

Which should tell you that the corporations and the wealthy elite are winning on that front - they''re increasingly positioning themselves so that they can abuse America''s workforce as they will without paying much if any penalty through their stock investments.

Secondly, the members of this Administration are the grandest liars in America''s history...everything they''ve done has been aimed at supporting the market, but they''ve managed to get the MSM to repeat, repeat, repeat their line that they''re in fact attempting to support the economy.

Which says the corporations and the wealthy elite are winning on that front, too: They now have de facto control of the MSM for propaganda purposes.

[forrestlayne]

RON PAUL tax plan would help the economy!
http://www.ronpaul2008.com/prosperity

http://www.cato-at-liberty.org/2007/11/09/defending-ron-pauls-tax-plan/

http://www.ntu.org/main/press.php?PressID=991&org_name=NTUF

[minminmin-2009]

I wonder what people making over $150,000 a year ($12500/month) wow, will do with their 500 or 600 bucks? Ya think they''''ll buy groceries, or pay their utility bilsl or keep their house from going into foreclosure, or possibly buy a nice 500.00 dinner out with champagne or wine. --Posted by ov442 at 10:54 AM : Feb 01, 2008

I make over $150,000 and I don''t buy $500 dinners. If I got a check for $500, I''d put it toward a new furnace; mine just went out. Yes, I make a good salary, but I also have a lot expenses, just like everyone else. My mortgage payment is high. I own horses (they''re expensive) and I DON''T live high on the hog. Am I complaining? Absolutely not, but even folks that make a little more money than most other folks have to make decisions about where to spend it. If the gov''t hands me a check for the purpose of spending it to stimulate the economy....I''ll go spend it. Personally though, I think it''s a waste of $$. The gov''t should be stimulating job growth, not spending.

[mcv57]

Posted by ForrestLayne

Enough already with the Rod Paul. He is not even close to being a saviour, ... opportunist maybe.

You need to take a course in college economics, than you will understand the bohemonth economic turmoil this world and its corrupt leaders (including the bushwacker) has created..

Example, remember the economic crash and calamity of South America a couple of years ago??? The U.S. only escape was foreign loans, that scandel is blooming.

[mediapreachr]

We''re in a recession for 3 or 4 months now.The official reports are delayed ''till the next guys take office.

[mcv57]

Posted by MinMinMin,

You sound like a yippie who has been caught-up in the real estate speculative scam. Too bad you did not major in economics, you would probably be able to hold on to some of that money you get (notice I did not use the term earned). Executives are nothing but corporate mobsters to me. Nobody can earn a million dollars (they steal it from the monopoly empires they are building).

[clestes-2009]

More good news for the American people. We are just innudated with good news today. Another huge bombing in Iraq, shrub says there is zero money for domestic issues, but still wants 70 billion for Iraq.

It is going to get worse before it gets any better. The question is, how much worse.

[middleman8]

Its a chance to buy more "Made in China products"
Don''t waste it.

[perception5]

In economic terms the definition of a "recession" is the following:

Two quarters of negative growth as measured by the GDP (Gross Domestic Product).

So far we haven''t had at least one quarter of negative growth.

FYI........................we aren''t in a recession right now but we are in a "slow down"

I guess if the most corrupt institution in America, our wolfpack press wants to write fictional "stories" that we are is up to them.

Where am I wrong?

[element51]

SgtRDS...Good comments. We plan to use our HUGE rebate to help our sons. They are age 23 and 26, married with one child each and they are struggling just to make ends meet. Both work and have jobs in the 10 to 11 dollar per hour range. But after everything is taken out of their checks there isn''t enough left over to pay even their essential living expenses. We paid all of their other bills off so all they have is rent, food, utilities, gas. It''s hard enough on us old folks but we have been around long enough to have learned to do with less but the young kids are just overwhelmed. It''s our kids and grandkids that I feel pain for. What will they do and how can they have any kind of future? It makes me sad.
There is no way that Bush can connect with our kids. He has ALWAYS had the best of eveything. Never has he had to do without and he has no clue as to what the real world is like. You cannot know what things are like for someone else until you have walked a mile in their shoes. Maybe he should have to walk back to Crawford just to get a little education.

[marcpcbs]

If we could just convince the Senate to get Exxon to back off with their greed we could turn this recession around.

[amishcar]

Ron Paul Money Bomb Today. Celebrating 51 years of Marriage Dr. Ron and Carol Paul. www.RonPaul2008.com Stop the Mega Main Stream Media from telling you who to vote for.

[minminmin-2009]

Mcv57 ---

You sound a little bitter there. I never said I didn''t have investments and $$ in the bank, I said I have expenses. I didn''t get caught up in speculative real estate scams. My only home is my primary residence. I do own a business tho. I also said I don''t live high on the hog. I just mentioned my furnace went out, and if someone handed me $500 bucks, I''d put it toward a new one. What makes you think I don''t deserve my salary? You don''t even know what I do.

[slim1h2o]

Posted by perception5 at 11:59 AM : Feb 01, 2008

The recession will come in the latter part of this quarter, Febuary/March.

The depression will come in July/August, 2 months after the $3.50 price per gal.(or more) kicks in.

[inventagod]

buSHAMErica

[mcv57]

You don''''t even know what I do.

Posted by MinMinMin

I know what you didn''t do . . . study economics.

To me, the real estate industry (especially brokers) are nothing more than used car saleman.

. . . and I know one thing about you, for a fact. You do not work for living! I doubt you know what WORK really is.

[bobnjersey]

[Where am I wrong?]
[Posted by perception5 at 11:59 AM : Feb 01, 2008]

you''re a republican?

[sgtrds]

The depression will come in July/August, 2 months after the $3.50 price per gal.(or more) kicks in.

Posted by slim1h2o at 12:19 PM : Feb 01, 2008

And Bush and his fellow crooks will sneak out of town in January, one step ahead of the posse. This has been the biggest case of grand theft in world history.

[walt1944-2009]

THE GREAT DEPRESSION OF 2008 IS COMING!!!!!

THE RECESSION OF 2007 IS ALREADY HERE, no matter what the Great Emperor Bush II and his Neocon Fascist Republican court say.

SIG HEIL, BUSH!!!!

[news4all]

Romney is the only candidate prepared to fix our economy!

His record for proof:

In 1990, Romney was CEO of Bain & Company, which was facing financial collapse. As CEO, within a year, he had led Bain & Company through a highly successful turnaround and returned the firm to profitability without layoffs or partner defections.

Romney served as president and CEO of the 2002 Olympic Winter Games held in Salt Lake City. Before he was called in, the event was running $379 million short of its revenue benchmarks. The Games ended up clearing a profit of $100 million.

In 2003, Romney was sworn in as Governor of Massachusetts--- Upon entering office, Romney faced a projected $3 billion deficit, but by 2006 the state had a $700 million surplus and was able to cut taxes.


Romney graduated from a joint Juris Doctor/Master of Business Administration program coordinated between Harvard Law School and Harvard Business School. He graduated *** laude from the law school and was named a Baker Scholar for graduating in the top five percent of his business school class.

Romney knows how to help our economy!

[slim1h2o]

And Bush and his fellow crooks will sneak out of town in January, one step ahead of the posse. This has been the biggest case of grand theft in world history.

Posted by SgtRDS at 12:30 PM : Feb 01, 2008

I agree, We will need to put GPS ankle bracelets on them, before they leave office. So we can track them down like the dogs they are! January 18th? Sounds good to me!

BTW, isn''t July 1st, the start of the fiscal year for the Government Budget?

[skyk-2009]

If we could just convince the Senate to get Exxon to back off with their greed we could turn this recession around.


--------------------------------------------------------------------------------

Posted by marcpcbs at 12:09 PM : Feb 01, 2008
+ report abuse

No I don''t think so. The cost of Gas is just one player in what is a house of cards. Bush and the Fascist keep interest rates so low for so long, keeping the housing market flying high, it was the ONLY floor the economy had while the greedy shipped all the good paying jobs out of the County. When we all understand that Trickle Down is ONLY hurting this nation. When we realize that the money given the rich, the money we borrowed, was NOT put back into this nation... they did not invest it in America, we''ll be able to start to rebuild this Country. Until then the slide to third world status will continue.

[skyk-2009]

Romney knows how to help our economy!


--------------------------------------------------------------------------------

Posted by news4all at 12:40 PM : Feb 01, 2008
+ report abuse

Have you absolutely lost your mind? Who do you think got us into this mess? The last thing we need is another CEO shifting more jobs out of the country and borrowing more money to give more to the Wealthy. Anyone who can look at what the Republican''s were handed by the previous President and look were we are, then argues to continue the same insanity, is an IDIOT!

[minminmin-2009]

. . and I know one thing about you, for a fact. You do not work for living! I doubt you know what WORK really is. --Posted by mcv57 at 12:22 PM : Feb 01, 2008

Are you defining work as physical labor? So, if I design circuits for network routers and switches, I''m not working? What am I doing then? Playing? Don''t deserve to get paid, even though I''m helping the data packets you send across the Internet get there faster? You''re right, I''ll tell all my engineers to go home. People in India can probably do it cheaper anyway.

[rowdytexan2]

President George W. Bush called Friday''s negative job report "troubling," saying it ends a 52-month streak of job growth.

His showing concern about jobs (which have been consistently losing despite his lies to the contrary) is just another spoof to allow him to give more to big business.

BEWARE! BEWARE!

[neoconslayer]

newsforall:
Romney made his money by throwing real Americans out of work and then taking the money and running.
You are correct that he knows alot about the economy: he knows how to sacrifice the working man for his greed.

[colvinatch]

This s a Republican recession

Caused by a Republican war

Based on Republican lies

[hypnotoad72]

The vicious circles, catch 22s, and so on have got to be thwarted. What can Americans do to reverse the trend? What education, manufacturing, creativity can we do?

As for the "seig heil" comments - kindly shove it where the sun don''t shine. It''s d!mn well offensive.

It''s not as much protectionism as it should be moving along with the times and reinventing ourselves.

Oh, go to this site:
http://glassbooth.org/

Put in 2 or 1 for your pet topics and answer the questions. I was surprised by my answers (top 3 candidates were Repubs; the 4th being Hillary Clinton.) The fun part is, the questions are one-sided and lacking context. What they think may not be what I think they''re thinking and vice-versa. (I''m against illegal immigration because of potential contagion risks... the medical system is pricey for starters... we don''t need any outbreaks. The world doesn''t. Eradicating disease is one thing; spreading it haphazardly is another.)

[buddhabman]

Iraq War = 200 Billion
US Economy = 155 Billion

Republican priorities = Nonsense.

[sgtrds]

BTW, isn''''t July 1st, the start of the fiscal year for the Government Budget?


Posted by slim1h2o at 12:40 PM : Feb 01, 2008

It used to be Oct 01, but I do believe they have changed it to July.

[enriquecaliente]

"Nervous employers cut 17,000 jobs in January - the first such reduction in more than four years and a fresh trouble sign that the U.S. economy is in danger of stalling."

LIES, look at all the MONEY Exxon has made.
Microsoft wants to buy Yahoo.
The war in Iraq is going just great.
(Even if it did, de-stableize the area)

Yeh, think of all the service sector jobs that the 17,000 people will be able to get. Everyone say after me.

Would you like fries with that, sir.?

Welcome to Walmart.!

[singingrick]

Why can''t you silly libs just support Bush? Why do you hate Jesus?

[neobrian-2009]

100 % CORRECT
This s a Republican recession

Caused by a Republican war

Based on Republican lies

Posted by colvinatch at 01:00 PM : Feb 01, 2008
-----------------------------
VERY TRUE WORDS
Greed Oil Perverts ! NO MORE GOP
Greed ,OIL ,Perverts ,..NO More GOP !
Enron,Halliburton,Blackwater gate,
Torture,Secret CIA Prisons
Plame Blame,..Scooter,..LIES
NO MORE GOP !!
Mortgage gate NO MORE GOP
Jack Abramoff,Duke Cunningham,Tom Delay NO MORE GOP
Wide Stance Perverts, No MORE GOP
GREED,LIES,DECEIT,PERVERSION,..NO MORE GOP
Friends Don`t let friends vote republicon !!
Do Your Part ! Eradicate this Evil Sect,..Before it Destroys the Entire Planet !!
The Future ,..OUR FUTURE is at stake ! NO MORE GOP

[mcv57]

. and I know one thing about you, for a fact. You do not work for living! I doubt you know what WORK really is. --Posted by mcv57 at 12:22 PM : Feb 01, 2008

Are you defining work as physical labor? So, if I design circuits for network routers and switches, I''''m not working? What am I doing then? Playing? Don''''t deserve to get paid, even though I''''m helping the data packets you send across the Internet get there faster? You''''re right, I''''ll tell all my engineers to go home. People in India can probably do it cheaper anyway.

Posted by MinMinMin

LoL, LoL, I am so sorry . . . but your sarcasism has much truth. Soon, you will be out of work also, LoL. Go live to India . . . cost of living is cheaper. Your best bet go work for one of their monopolized utility state run companies, LoL.

[singingrick]

Silly libs. If this is a recession, then why are Exxon and Halliburton boasting record profits? Guess you can''t answer that can you?

Didn''t think so.

Bump!

[singingrick]

Silly libs. If this is a "recession" then why are Bush''s friends all making so much money?

Can you answer that one?

Thought not.

Bump!

[mcv57]

Republicans favor laws and conditions that give preference to existing, large businesses.

That favors existing, large businesses.

Get smart vote for the little guys, Vote Democrat and watch opportunity grow... just as it always has under Democratic Administrations starting with FDR.

Posted by Nancy_Naive

U.S. government and the White House regime owns BIG CORPORATION.

[mcv57]

Why can''''t you silly libs just support Bush? Why do you hate Jesus?

Posted by singingrick

The Bible did say, "the Beast shall appear as an Angel of light" didn''t realize it was talking to dumb bunnies like you.

[dredre2k]

Think the economy is bad now? Wait until gas goes up to $3.50 and $4.00? Then, it will cast $50.00 just to fill up a UGO... How much higher will the price of gas have to go before people start protesting?

If gas hits $4 or $5, it will be hard for me to fill my tank on a regular basis. How about anyone else here?

[gheemaster38]

On a lighter note the members of of Shell posted a 36 Billion dollar profit(Is this after expenditures?) Of course, they will have to up the price of gas to $3.50 since there is a shortage of the "summer Mixture." ***? Why should we have to pay more because they are to cheap make enough mixture? Oh, wait I get it, this is just another way to post a great profit for the 2nd and 3rd qtr. Those guys in oil are so smart... geezz.

[missingamerica]

U.S. government and the White House regime owns BIG CORPORATION.

Posted by mcv57 at 01:20 PM : Feb 01, 2008

You got that backwards.

[singingrick]

The worse it gets, the better it looks to me. I love Bush!

[grazinggoat]

If you only get meager pay raises like 3% or less, for years while Gasline Triples, utilities at least Double, insurance Doubles, food increases 50% or more, what in the world do people think is happening? or going to happen to the economy?

Posted by ov442 at 10:48 AM : Feb 01, 2008

-ov442, just look at what you said. And now guess who is pushing for the war in Iraq, Afghanistan, Iran. They spared the Saudi Kingdom, because they just can''t create too much turmoil in the Kingdom, since it''s an already Acquired RICH Market. King Abdullah just signed with the American military consortium a 20+ Billion$$ arm deal, that he obviously does not need. Bush needed to armtwist it because he knows America''s economy is about to breakdown (hence a 1,25% reduction of bank prime rate by FED''s Burnanke). Wish it wont.

Bush adventurous invasions in Middle-East: the worst ever miscalculated, from the WORST president ever.

[news4all]

Not only is Romney best qualified to help our economy, but he is investing his own money in his campaign unlike McCain and the others who have sold themselves to lobbyists).

Romney is a self-made millionaire and has helped others by creating jobs, saving businesses and donating millions of dollars over the years (not including his salary as governor and CEO of the Olympics). Romney is not running for power or money, but to serve the country. He is the only one qualified to help the economy!

[slim1h2o]

It used to be Oct 01, but I do believe they have changed it to July.

Posted by SgtRDS at 01:09 PM : Feb 01, 2008

Yup,, I believe that too. So therefore, the depression will start some time in the August/September frame, Wonderful! No?

Right on time for the 11th!