Sunday, Feb 1, 2009
The jobless rate in the U.S. probably jumped in January to the highest level in 16 years as slumping sales forced employers to slash staff, economists project reports this week will show.
Unemployment climbed to 7.5 percent, and payrolls fell by 530,000, the 13th consecutive decrease, according to the median estimate in a Bloomberg News survey ahead of Labor Department figures Feb. 6. Other reports may show manufacturing, services and housing shrank further, signaling more firings ahead.
Plunging demand and frozen credit are causing companies from Caterpillar Inc. to General Motors Corp. to pare jobs and output to prevent unsold goods from piling up. Concern that the recession will deepen after the economy contracted at the fastest pace in 26 years last quarter is prompting President Barack Obama to push for quick passage of his stimulus plan.
“The labor market will look terrible for a while,” said Sung Won Sohn, a professor of economics and finance at California State University Channel Islands, in Camarillo, California. “If the downward momentum is not arrested, the consequences could be disastrous. Policy makers need to act quickly.”
The jobless rate in December reached 7.2 percent. Employers cut 524,000 workers from payrolls that month, bringing total job losses in 2008 to 2.6 million, the most since 1945.
(Article continues below)
This week’s report may also show manufacturers cut 143,000 jobs following a reduction of 149,000 in December that was the biggest since 2001, according to the Bloomberg survey.
This article was posted: Sunday, February 1, 2009 at 5:35 am