WASHINGTON — The nation lost nearly 600,000 jobs last month, the worst showing in a third of a century, as a vicious cycle of cutbacks by consumers forced ever more layoffs by beleaguered employers. The unemployment rate catapulted to 7.6 percent, the highest in 16 years, and seems headed for double digits.
About 3.6 million jobs have disappeared so far in a deepening recession, which is shaping up as the biggest job killer in the post-World War II period.
On Wall Street, investors optimistically assumed congressional action on a stimulus bill was on the way and pushed stock prices higher. The Dow Jones industrials gained more than 217 points, and all broad stock indexes surged nearly 3 percent.
Battered by the recession, employers slashed a net 598,000 jobs in January, the most since 1974, the Labor Department reported Friday. The jobless rate surged from 7.2 percent in December to 7.6 percent, and economists and government officials all agreed the toll was certain to go higher.
“These numbers demand action,” President Barack Obama declared, urging Congress to waste no time in completing work on the economic recovery package. “If we drag our feet and fail to act, this crisis will turn into a catastrophe. We’ll continue to get devastating job reports like today’s month after month, year after year.”
The jobs lost so far since the recession began in December 2007 are the most of any downturn in the post-war period. About half the losses occurred in the past three months.
Layoffs this month are likely to be just as bad. Economists predict anywhere from 2 million to 3 million or more jobs will disappear this year and the unemployment rate probably will climb to 10 percent or higher by the spring of 2010.
The pink slips are hitting all categories of workers — blue collar, white collar, those without high school diplomas and those with college degrees. They’re sparing few occupations or corners of the country.
With no replacement work to be found, the ranks of unemployed workers climbed to 11.6 million. In addition, 7.8 million people were working part time. The category includes those who would like to work full time but whose hours were cut back or those who were unable to find full-time work.
The average workweek in January stayed at 33.3 hours, matching the record low set in December.
If part-time employees, discouraged workers and others are factored in, the unemployment rate would have been 13.9 percent in January, the highest in records going back to 1994.
The average time it took for an unemployed person to find any job, full or part time, rose to 19.8 weeks in January, compared with 17.5 weeks a year earlier.
