Shobhana Chandra
Bloomberg
February 7, 2009

Millions more U.S. workers are likely to lose their jobs after the economy’s freefall sent unemployment in January to the highest level since 1992 and payrolls tumbled, reinforcing the need for an economic stimulus plan.

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The jobless rate rose to 7.6 percent from 7.2 percent in December, the Labor Department reported yesterday in Washington. Payrolls fell by 598,000, the biggest monthly drop since December 1974. Losses spanned almost all industries, from construction and manufacturing to retailing, trucking, media and finance.

“The scary thing is there is really no end in sight to the soaring jobless rate,” said Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd. in New York. “It’s difficult to see what’s going to turn the situation around. This is the sort of catalyst that could get Congress to move” to agreeing on a compromise plan.

President Barack Obama, who predicted a “dismal” report, is pushing for a stimulus plan to revive the economy and create jobs, and is expected to announce a new effort to shore up credit markets. The rate of the job market’s decline means it’s unlikely government efforts will halt a collapse in consumer spending until the second half of the year, economists said.

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