U.S. employment plunged in January by a three-decade high, a government report showed, bringing total job losses since the recession started in December 2007 to 3.6 million.
Half of those losses occurred in the last three months alone, and the stepped-up pace of layoffs in recent months suggests no end in sight to the economic downturn.
The report, which included another sharp rise in the unemployment rate to a 16-year high, upped the heat on U.S. lawmakers to enact a large fiscal stimulus package.
Nonfarm payrolls, which are calculated by a survey of establishments, tumbled 598,000 in January, the U.S. Labor Department said Friday, the most since December 1974 and well above the 525,000 drop Wall Street economists in a Dow Jones Newswires survey expected. December was revised to show an even steeper decline of 577,000.
The U.S. "is contracting greatly," said Christina Romer, head of the White House Council of Economic Advisers, and the jobs data "reinforce the need for bold fiscal action."
The government included revisions for all of 2008, which showed the U.S. lost about 3 million jobs last year, roughly 400,000 more than first thought. In the 12 months through January, the economy shed more jobs over that timeframe since the government started compiling those figures in 1939.
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"Job losses in January were large and widespread across the major industry sectors," said Keith Hall, commissioner of the Bureau of Labor Statistics. Mirroring the government data, a Who's Who from Corporate America including Caterpillar Inc., Home Depot Inc., Black & Decker Corp. and Microsoft Corp. all announced layoffs in January.
The unemployment rate, which is calculated using a survey of households, jumped 0.4 percentage point to 7.6%, the highest since September 1992. Employment in the household survey plummeted by more than 1.2 million. Some economists think the jobless rate may hit 9% in coming months.
"Probably for the next couple of months we'll see this hemorrhaging continuing," said Bill DeMario, president of Ajilon Professional Staffing, a unit of Adecco SA. "At this point it's kind of becoming self-perpetuating," as companies adjust to the recession.
By some broader gauges labor-market conditions are even worse than the main numbers suggest. When marginally attached and involuntary part-time workers are included, the rate of unemployed or underemployed workers actually reached 13.9% last month, up almost five percentage points from a year earlier. The employment-to-population ratio was the lowest since 1986.
"By every measure available -- loss of employment and hours, rise of unemployment, shrinkage of the employment to population rate -- this recession is steeper than any recession of the last 40 years, including the harsh recession of the early 1980s," said Lawrence Mishel, president of the Economic Policy Institute, a liberal think tank in Washington, D.C.
With no more room to lower official interest rates, which are near zero, Fed policymakers now have to rely on quantitative easing through the Fed's balance sheet to pump money into the financial system. Officials will likely face more pressure to widen their efforts to perhaps even include purchases of longer-term Treasury securities.
Average hourly earnings increased a modest $0.05, or 0.3%, to $18.46. That was up 3.9% from one year ago.
Friday's numbers, along with grim automobile and retailer sales reports, suggest that the economy hasn't stabilized after the fourth quarter's 3.8% slide in gross domestic product, which was the steepest since 1982.
According to Friday's report, hiring last month in goods-producing industries plunged by over 300,000. Within this group, manufacturing firms cut 207,000 jobs, the most since the 1982 recession, with losses concentrated in fabricated metals and motor vehicles and parts.
Construction employment was down by 111,000.
Service-sector employment tumbled 279,000. Business and professional services companies shed 121,000 jobs, the third-straight six-figure loss, and financial-sector payrolls were down 42,000.
Retail trade cut over 45,000 jobs, the 12th-straight loss, while leisure and hospitality businesses shed 28,000, as households curtail nonessential spending.
Temporary employment, which economists consider a leading indicator of future job prospects, fell by more than 76,000.
Among the sole bright spots were health care and education, which tend to be more labor intensive and less productive than manufacturing and other services. Employment in those sectors together rose 54,000.
The government added 6,000 jobs.
The average workweek was unchanged at 33.3 hours, though that's still down sharply from one year ago. A separate index of aggregate weekly hours fell 0.7 points to 102.6.