The fury of the recession intensified in January, as the unemployment rate jumped to 7.6% while nonfarm payrolls fell by the largest amount in 34 years, the Labor Department reported Friday.
Nonfarm payrolls fell by a seasonally adjusted 598,000 in January after a revised loss of 577,000 in December, the government said. It's the largest payroll loss since December 1974, according to a survey of workplaces. Payrolls fell by 597,000 in November.
"Job losses were large and widespread across the major industry sectors," said Keith Hall, head of the Bureau of Labor Statistics. Manufacturing saw its largest decline in 26 years.
About 3.6 million jobs have been lost since the recession began just over a year ago; about half of them have been lost in the past three months following the collapse of Lehman Bros.
Total hours worked in the economy fell by 0.7% in January and were down 4.6% from a year earlier. The average workweek was steady at a record-low 33.3 hours.
Meanwhile, a separate survey of households showed 11.6 million people were unemployed and looking for work, totaling 7.6% of the workforce, compared with 7.2% in December. It's the highest unemployment rate since September 1992.
After adding in those who are too discouraged to look for work and those who are forced to cut back their hours to part-time, the alternative unemployment rate rose to 13.9% from 13.5%.
The employment-population ratio fell to 60.5%, down from 62.7% at the beginning of the recession, and the lowest since 1986.
Job losses in all of 2008 were also larger than previously reported at 3 million. In its annual benchmark revision, the government said employment at the end of the year was 138.2 million, 311,000 less than it reported a month ago. The revisions incorporate updated information from payroll tax returns from businesses.
The payrolls report was worse than anticipated. Economists surveyed by MarketWatch were looking for job losses of 525,000 and an unemployment rate of 7.5%.
Job losses were widespread across industries.
The goods-producing industries lost 319,000 jobs, the most since 1975. Manufacturing payrolls fell by 207,000, the most since 1982. Manufacturing employment has fallen by 1.1 million since the recession began in December 2007. Of 83 manufacturing industries, just 8% were hiring in January, the lowest percentage on record dating back to 1991.
Construction employment fell by 111,000 in January and is down 781,000 since the recession began.
Services-producing industries cut employment by 279,000 in January, including 76,000 temp jobs, 45,000 in retail, 44,000 in transportation, and 42,000 in financials. Health care added 19,000 jobs.
Of 271 industries across the economy, only 25% were hiring in January.
Average hourly earnings rose by 5 cents to $18.46, or 0.3%. In the past year, average earnings are up 3.9%, while prices fell down about 0.7%.
