Recession Fears Mount as Jobs Drop Unexpectedly

January payroll contraction another red flag
By Jonas Oransky,  Newser Staff
Posted Feb 1, 2008 9:27 AM CST
Kyle Loftis, website integration representative, works at his desk at PayPal, in La Vista, Neb., Thursday, March 8, 2007. (AP Photo/Nati Harnik)   (Associated Press)
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(Newser) – Nonfarm payrolls declined 17,000 in January, the first monthly loss of US jobs since August 2003. The surprising loss—in manufacturing, construction, financials, and government—seems to vindicate aggressive action by the Fed, the Wall Street Journal reports. The number, which had been expected to climb by 75,000 jobs, raised both recession worries and hopes for yet another Fed rate cut.

Unemployment fell in January. A revision of December job growth from 18,000 to 82,000 may benefit consumer confidence, but November stats were revised downward to 60,000, nearly halving earlier figures. The January loss of 28,000 manufacturing jobs was the sector’s 19th straight decline, and a drop of 27,00 jobs was the construction industry’s seventh straight drop.