U.S. Jobless Rate Pushes the Crisis Even Further

crisis1Almost 600,000 U.S. jobs were wiped out in the month of January, driven by layoffs undertaken by some big corporations, such as the equipment producer Caterpillar or the retailer Macy’s.
This is the largest level for the last 16 years, since January 1992, and at that time we were amidst a different crisis. The jobless rate, calculated by the Department of Labour, increased from 7,2% to 7,6%. President Barack Obama is likely to use the first employment report since he took office to push lawmakers into agreeing on a compromise economic stimulus package by the end of February. The U.S. economy has now lost a total of 3.57 million jobs since the recession started in December 2007, the biggest contraction after the second world war. The House of Representatives last week passed an $819 billion stimulus package that includes tax cuts and infrastructure spending. The Senate is working on a plan that is closer to $900 billion.
In a speech held in Washington, Obama reckoned that failure to act now can turn the crisis into a catastrophe. There is therefore a big push to act now, but signs of doing so are failing to appear.
The largest fall appeared in the factory payrolls, where they dropped by 207,000, the biggest decreases since October 1982. The decrease included a loss of 31,300 jobs in auto manufacturing and spare parts industries. Service industries, which include banks, insurance companies, restaurants and retailers, gave up to 279,000 workers after cutting 327,000 in the prior month (December).
The average work week remained at 33.3 hours in January. Average weekly hours worked by production workers fell to 39.8 hours from 39.9 hours, while overtime decreased to 2.9 hours from 3 hours. Average weekly earnings rose by $1.67 to $614.72.

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