Payrolls drop and the unemployment rate declined

The past January, many nervous employers kept cutting jobs. The unemployment rate has declined from 5 percent in last December, to 4.9 percent in January.

Employers have grown cautious as they try to adjust to the fall in the housing market. Many employers are cutting back on their spending. They are carefully postponing their capital purchases, slowing down unnecessary new hiring, and shrinking their investment as interest rates fall. This particular business mind-set actually weakened our economies growth. Last month, about 17,000 jobs were lost. Some people quit their jobs for all kinds of reasons. Most people were eliminated from their jobs. The group of people who were hit the worst is the construction workers and factory works. As the housing market is crashing to the ground, factories are shutting down or moving overseas, many Americans suffer the consequences directly.

In order to help the economy recover, the Federal Reserves announced that it will give banks another $60 billion in short-term loans through actions in February. President Bush prodded the Congress to pass an economic rescue package.

Still, fear of recession has grown. If the economy keeps contracting for six months, it is considered to be in a recession. Many analysts strongly believe that the economy will be in a recession in the first half of 2008. Market Watch from Washington, actually indicates that based on today’s government report, our economy has entered a recession.

http://biz.yahoo.com/ap/080201/economy.html
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