Unemployment rate soars in January

The U.S. unemployment rate increased from 7.2 percent in December 2008 to 7.6 percent in January—the highest since September 1992, according to MSNBC.com.

Employers cut 598,000 jobs in January, which was significantly higher than the 524,000 losses economists expected. Since the recession began in December 2007, 3.6 million jobs have been lost; about 50 percent of that decline happened during the past three months.

Companies have tried to combat the plummeting economy by cutting payrolls, freezing wages, trimming hours and employing pay cuts. Manufacturing employment was hit particularly hard in January, losing 207,000 jobs. Construction employment fell by 111,000 jobs, and retail employment fell by 45,000 jobs.

As consumers pull back spending, companies also are cutting back, perpetuating a cycle that has led to a weakening economy. Many economists believe the current quarter will be the worst of the recession in terms of lost economic growth; analysts predict up to 3 million jobs will be lost this year.

President Barack Obama has been urging Congress to enact a multibillion dollar economic stimulus package that he says will save or create more than 3 million jobs during the next two years. The Senate will vote Tuesday on an $800 billion-plus package largely created by moderate Republicans and Democrats who supported big cuts in spending. The package then will go into House-Senate negotiations, and President Obama most likely will be involved.

Date : 2/9/2009