Economy Loses 17,000 Jobs in January

Washington, DC, February 1, 2008—Employers slashed 17,000 jobs in January, according to the Labor Department, while economists were expecting about 70,000 additional jobs.

The Labor Department reported that the unemployment rate fell slightly to 4.9 percent, from 5 percent.

Jobs were cut in manufacturing, construction, and a variety of professional and business services. The government also cut jobs, although there were gains in education, health care, retailing and elsewhere.

Employers appear to have grown cautious as they try to cope with problems in the housing and credit markets, as well as the overall economy.

Wages also grew more slowly last month.

Average hourly earnings rose to $17.75 in January, a 0.2 percent increase from the previous month. Over the last 12 months wages went up by 3.7 percent.

The drop in payrolls marked a significant decline in employment conditions. In December, employers added 82,000 new jobs. January's decline was the first since August 2003.