Hours worked in durable manufacturing fell at a 30.7 percent annual rate since October.
The January employment report showed the economy losing 598,000 jobs in the month. In addition, there were sharp upward revisions to the job loss figures for the prior two months. The data now show the economy losing 1,772,000 jobs over the last three months, an average of 591,000 jobs per month. All of this job loss came in the private sector, as employment in the government sector was unchanged over this period.
The data in the household survey indicates an even more dire situation. The unemployment rate rose by 0.4 percentage points (pp) in January to 7.6 percent. The employment rate fell by 0.5 pp to 60.5 percent, a level that is already 0.7 percentage points the low hit in the 1990-91 recession. The 1.5 percentage point drop in the employment rate over the last three months is equivalent to a decline in employment of 2,800,000 people.
The sharper drop in employment implied by the household data could be attributable in part to the fact that the Labor Department imputed more jobs for new firms not captured by the survey in recent months than it did in the corresponding months for the prior year. It is implausible that new firms have generated more jobs in the four months between September of 2008 and January of 2009 than in the corresponding months of the prior years.
While unemployment is hitting all demographic groups, blacks and Hispanics have been hit hardest. The unemployment rate for African Americans rose by 0.7 pp to 12.6 percent in January, an increase of 3.4 pp from its year ago level. Black men have been hit especially hard. Their unemployment rate rose by 0.7 pp to 14.1 percent, an increase of 5.8 pp from its year ago level. The unemployment rate for Hispanics rose by 0.5 pp to 9.7 percent, a rise of 3.4 pp from the year ago level.
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