WASHINGTON: The US economy suffered 17,000 job losses last month, marking the first monthly losses since 2003, according to a government report last Friday which highlighted fears that America is sliding into recession.
The surprise loss in non-farm payrolls caught most economists off guard as many had expected employment growth to continue last month.
Economists had anticipated that the world’s biggest economy would create 70,000 new jobs in January, but the Labour department said payrolls fell for the first time since August 2003 in a report president George W Bush called “troubling”.
“We should expect to see more bad news on the labour market, at least through the middle of the year, before the heavy doses of monetary and fiscal stimulus begin to kick in,” Nigel Gault, an economist at Global Insight, said.
The government revised December’s job growth significantly higher to show 82,000 new posts were created compared with an initial estimate of 18,000 positions.
The national unemployment rate, based on a separate survey, declined slightly to 4.9% last month compared with 5% in December. Economists said this was partly because fewer people were seeking work.
“Ultimately, it means the Fed has got to keep cutting (interest) rates,” Ian Morris, a chief US economist at HSBC North America, said. – AFP