February 02, 2008	Saturday	Muharram 23, 1429

WASHINGTON, Feb 1: The US economy suffered 17,000 job losses in January marking the first monthly losses since 2003, a government snapshot showed on Friday in a fresh sign of brewing economic trouble.

The surprise loss in nonfarm payrolls caught most economists off guard as many had predicted that employment growth would continue in January.

Economists had anticipated that the world’s biggest economy would create 70,000 new jobs in January, but the Labour Department said payrolls fell for the first time since August 2003.

“We should expect to see more bad news on the labour market, at least through the middle of the year, before the heavy doses of monetary and fiscal stimulus begin to kick in,” said Nigel Gault, an economist at Global Insight.

The government revised December’s job growth significantly higher to show 82,000 new posts were created compared with an initial estimate of 18,000 positions.

The national unemployment rate, based on a separate survey, declined slightly to 4.9pc last month compared with 5.0pc in December.

Economists said this was partly because fewer people were seeking work.

“Overall this report has a feeling that the job cycle is in danger of weakening further and even though the unemployment rate decline was welcome, it unfortunately has the look of a down blip in a rising trend so unemployment is still likely to trend up over time,” said Ian Morris, a chief US economist at HSBC North America.

“Ultimately, it means the Fed has got to keep cutting rates,” Morris said.

The monthly job survey was released after the government reported on Wednesday that US economic growth slowed dramatically to a 0.6pc annualised crawl in the fourth quarter of 2007 from a blistering 4.9pc in the prior quarter.

“There are certainly some troubling signs, serious signs that the economy is weakening and we’ve got to do something about it,” President George W. Bush said during a visit to the Midwestern state of Missouri.

The Federal Reserve has launched an aggressive rate-cutting drive to shore up growth amid mounting fears that the economy could be falling into a recession.

Congress meanwhile is debating an economic stimulus plan worth around $150 billion amid rising political angst about the state of the economy.

A persistent housing slump is threatening to derail growth and is triggering job losses.—AFP