US job cuts last month highest since 1974, unemployment rate rises

February 6, 2009

As a result of the ongoing global financial crisis of 2008–2009, American employers have cut 598,000 jobs over the past month, the most in one month since December 1974. The unemployment rate also rose approximately 0.4 percent, bringing the rate up to 7.6 percent (11.6 million people), the highest since January 1992. This is according to the United States Labor Department's monthly unemployment report released last week.

US President Barack Obama asked Congress today to support and quickly pass a $900 billion economic stimulus package that would, according to some, help create more jobs and decrease the unemployment rate. "All of us in Washington must remember that we’re here to work for the American people. And if we drag our feet and fail to act, this crisis will turn into a catastrophe," said Obama in a statement this morning.

Obama warned that the rate could grow to double digits if Congress did not act fast and pass the bill allowing the package, and stated that the report was "very troubling."

"These numbers demand action. It is time for Congress to act," he also said, "That's 3.6 million Americans who need our help," he stated, referring to the number of American workers that had been laid off since the United States officially entered economic recession in December 2007.

Factories have been hit the hardest in the past month, laying off 207,000 workers, approximately 20 percent of the month's layoffs and the most by the industry since 1982. The next highest was the construction industry, which cut an estimated 110,000 workers last month. Other hard-hit industries include the financial industries, cutting 42,000 jobs, the retail industry, which cut 46,000, and leisure and hospitality, losing 28,000 workers.

"This is a horror show we’re watching. 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," stated Lawrence Mishel, an economist and president of the Economic Policy Institute, a US-based research organization focused on the economy. Economic forecasters reported that their predictions had actually been less severe than the report stated.

The United States Congress is currently debating a $900 billion economic stimulus bill that will attempt to halt the recession, and will continue to do so until a measure has been reached.