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Recession in the air: first decline in US jobs since August 2003

Sunday, February 3rd 2008 - 20:00 UTC
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United States has seen the first decline in employment since August 2003, providing fresh evidence that the US economy could be entering a recession. Employers cut 17,000 jobs from their payrolls in January, Labor Department figures showed. Economists had been expecting a rise of 80,000.

The US economy has slowed sharply in recent months as a housing market slump has dented consumer spending and the Federal Reserve has cut drastically interest rates, twine in nine days to boost growth. In a speech in Kansas on Friday, President George Bush acknowledged that the US economy was going through a rough patch and urged lawmakers in Washington to pass an economic stimulus package. "Inflation's low. Productivity's high, but there are certainly some troubling signs, serious signs that the economy is weakening and that we've got to do something about it," Mr Bush said. US Congress and the Bush Administration have agreed an economic stimulus package which would add 150 billion in tax rebates. The measure has already been passed by the House of Representatives but is still awaiting Senate approval. The job losses were across all sectors of the economy including manufacturing and professional services. The unemployment rate fell to 4.9% from 5% in December, a two-year high, but overall the number of people in the labour force declined. The Federal Reserve cut interest rates to 3% from 3.5% on Wednesday. It followed an emergency unscheduled cut last week, when the Fed slashed the cost of borrowing by the largest amount in 25 years to prevent the economy from slowing further.

Categories: Economy, United States.

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