Employers eliminated 651,000 jobs last month, the Labor Department said today in Washington. Losses have now exceeded 600,000 for three straight months, the first time that’s happened since the data began in 1939. Revisions to the previous two months lopped off an additional 161,000 positions.
Today’s report indicates the economy may need additional federal measures to help stop what may become the worst recession in the postwar era. The jobless rate has now already reached the level the Obama administration projected as an average for the whole year.
“The magnitude of what is happening now is overwhelming what steps the Obama administration has already taken,” said Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “The situation is much worse now than when they began” considering stimulus efforts, he said.
While President Barack Obama’s $787 billion stimulus plan aims at creating or saving 3.5 million jobs, today’s report showed the U.S. has now already lost 4.4 million since the recession began in December 2007, with more declines coming. Tumbling global demand is prompting companies from General Motors Corp. to Sears Holdings Corp. to step up firings.
“As unemployment continues to rise, our foreclosure crisis will only grow worse,” Representative Carolyn Maloney, chairman of the congressional Joint Economic Committee, said in a statement. Labor Secretary Hilda Solis said “we will continue to do whatever is necessary to break the destructive cycle of job loss.” Her department is releasing $3.5 billion to states to help pay for education, training and employment services.
The drop in payrolls for January was revised to 655,000, and December’s to 681,000, the biggest decrease since October 1949.