Unemployment Rate Hits 7.6 Percent in January

The U.S. economy lost another 598,000 jobs in January, a larger-than-expected decline that highlighted a weak global economy and the pressure building on companies to cut costs and payrolls.

It was the largest one-month job loss since December 1974, and pushed the unemployment rate to 7.6 percent, from 7.2 percent in December.

That is the highest unemployment rate since the fall of 1992 -- and it would have been higher except for a slight decline in the number of people looking for work, itself a possible sign of economic weakness as people become discouraged from job-hunting.

At present, 11.6 million people are out of work, a headline number likely to figure into ongoing debate in the Senate today over the Obama administration's proposed economic stimulus package.

President Obama has warned of possible double-digit unemployment if the government does not act quickly, and called today's news "devastating."

In announcing the creation of the new Economic Recovery Advisory Board this morning, Obama said, "I am sure that at the other end of Pennsylvania Avenue, members of the Senate are reading these same numbers this morning. I hope they share my sense of urgency and draw the same, unmistakable conclusion: The situation could not be more serious. These numbers demand action. It is inexcusable and irresponsible to get bogged down in distraction and delay while millions of Americans are being put out of work. It is time for Congress to act."

U.S. businesses and institutions have shed jobs for 13 consecutive months, and the increasing pace of the job losses might indicate worse to come. Since the recession began in December 2007, 3.6 million payroll positions have been lost, with about half of that decline coming in the past three months, according to data released this morning by the Labor Department.

Major companies in recent weeks have announced plans for tens of thousands of fresh layoffs, creating momentum that might push the unemployment rate even higher in coming months. Rising joblessness, among other economic issues, has undercut retail spending and steered the auto industry into a historic sales slump, and is one of the chief problems lawmakers are hoping to address with massive government spending.

The figures released on Friday indicate broad weakness in the labor market, with losses spread throughout the economy. Manufacturing companies dropped 207,000 jobs -- a more than 1.5 percent decline from the prior month -- and construction firms shed 111,000. The service sector -- long a stable source of job growth and touted as the country's economic strength -- lost 279,000 jobs, including 42,000 positions in the financial sector and 45,000 among retailers.

Health care and education continued their run of steady job increases.

In addition to the rising number of unemployed, about 7.8 million are working part time even though they would like full-time work. That number was relatively unchanged from December to January, but has increased by about 3.1 million over the past year. Another 2.1 million people were considered "marginally attached" to the labor force -- meaning they were available for work and had looked for a job at some point in the past year, but are not counted in the unemployment rate because they had tried to get a job in the past month.

Based on measures such as the number of jobs lost, the decline in hours worked and other statistics, "this recession is steeper than any recession of the last 40 years, including the harsh recession of the early 1980s. This is a horror show we're watching," said Lawrence Mishel, president of the Economic Policy Institute, a liberal economic think tank.