13:35 US ECON: January Payrolls Fall 598,000; Unemployment At 7.6%

The US unemployment rate surged faster than expected in January to 7.6%, its highest level in more than 16 years, as the economy shed the largest number of jobs in 34 years, the Labor Department said today. The economy lost 598,000 jobs in January, the largest decline since December 1974.  Economists were expecting 524,000 jobs lost. 
    The economy has now lost 3.5 mln jobs over the last twelve months, the largest decline over any 12 month period since 1939, although the labor force at that time was far smaller.  Economists have said the economy needs to create about 100,000 jobs each month to keep up with new workers, but with January's numbers, the economy has averaged a loss of about 292,000 jobs per month over the last 12 months.  
    Labor revised November and December payrolls lower by 66,000, for a cumulative two-month total of 1.174 mln jobs lost.
    The unemployment rate, taken from a separate survey of households, rose to 7.6% in January, the highest rate since September 1992. Economists were expecting unemployment to rise to 7.5% from the 7.2% reported in December. The labor force participation rate, which includes the number of working- aged people with jobs, fell to 65.5%, the lowest since September 1987.
    Services jobs are usually a major factor in job gains, but 279,000 jobs were lost in this sector in January.  Service-sector jobs have declined for the last 13 months. Construction jobs fell once again, by 111,000, and manufacturing jobs lost 207,000, the largest decline in this sector since October 1982. 
Manufacturing jobs have not increased in 31 months. Retail jobs fell by 45,100, and January was the 14th straight month of job losses in this sector. Government added 6,000 jobs in the month and education/health services added 54,000 jobs. 

These are the only two categories that have seen job gains in the last ten months.
    Average hourly wages rose by 0.3% in January, more than the 0.2% gain economists were expecting. That translated to a gain of 5 cents, putting the average hourly wage at $18.46. The average workweek was unchanged at 33.3 as expected.

Source:Thomson Reuters