Record Job Losses in January
After the last several months, we are growing accustomed to seeing some pretty shocking numbers when it comes to the economy. January’s job numbers were released today, and they highlight just how difficult things really are for companies and employees trying to survive this recession.
During the month of January, 598,000 people lost their jobs-much worse than the 524,000 job losses that economists had expected for the month. The last time we saw a job loss number that high was 1974, officially making January the worst month for job losses in 35 years. The unemployment rate jumped to 7.6% on the news, the highest level its reached since 1992 and up from 7.2% in December. In total, over 3.6 million jobs have been lost since the recession officially began in December of 2007, and more than half of those jobs have been eliminated in just the last 4 months.
There are a lot of economists who are now saying that February could easily be worse than January, and most agree that things are likely to get worse before getting better. Let’s not forget that millions of jobs in the financial and auto industries have been saved as a result of government bailouts-the real picture could be much worse than what we’re seeing in these most recent numbers.
The job losses were widespread, with factory workers bearing the brunt of the job losses, as over 207,000 of them lost jobs in January. Over 120,000 jobs were lost among business professionals, while more than 110,000 jobs were lost in construction. The only sectors that posted gains in employment were government, education, and healthcare.
Employers who are not necessarily handing out pink slips are still making cuts that hurt employees. For example, several high profile companies have announced losses of benefits, including the elimination of matching employee contributions to retirement accounts. Hours have been cut for many employees-the average work week for an employed person in January was 33.3 hours, a record low.
Job hunters are facing a difficult task in finding new employment, as fewer employers are hiring in this environment and there is more competition for available positions. Over 2.6 million people have been without a job for more than 6 consecutive months, the largest number of people to go that long without a job since 1983. Many of the unemployed are taking the time to develop new knowledge and skills to make them more marketable in a competitive job market.
While it’s difficult to find a silver lining in this news, there is hope that lawmakers will increase their efforts to get a stimulus plan in place sooner rather than later as the situation worsens. One of the chief goals of the proposed plan is job creation, but it’s impossible to say how quickly these changes will have an impact.
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Tags: government bailouts, job losses, recession, unemployment
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