US unemployment rate up to 7.6 percent

The US unemployment rate rose to 7.6 percent in January, according to official figures, putting it at its highest level since 1992, and signaling that the recession in the worldÔÇÖs largest economy is deepening as companies are reluctant to hire.  ┬á┬á Americans cut back drastically on spending at the end of last year, launching the economy into its worst relapse in a quarter-century.  ┬á┬á Vanishing jobs and evaporating wealth from tanking home values, 401(k)s and other investments have forced consumers to retrench, which has required companies to pull back.  ┬á┬á Many economists predict the tailspin to accelerate, and that the current quarter - in terms of lost economic growth - will be the worst of the recession as it drags on into a second year, and consumers and businesses burrow deeper. ┬á Payrolls fell by 598,000 in January, the biggest monthly decline since December 1974, after dropping by 577,000 in the previous month. All said and done, the economy has lost a staggering 3.6 million jobs since the recession began in December 2007, the biggest employment slump of any economic contraction in the postwar period, with about half of this decline occurred in the past three months. ┬á TodayÔÇÖs report showed factory payrolls decreased by┬á207,000, including a loss of 31,300 jobs in auto manufacturing and parts industries. Caterpillar, the worldÔÇÖs largest maker of construction equipment, on Jan. 30 said it plans to cut 2,110 workers in addition to the 20,000 reductions it reported earlier in the month. ┬á Saks Inc., Target Corp., Starbucks Corp. and Home Depot Inc. last month reported plans to reduce workers. Others following suit in February include MacyÔÇÖs. The second-largest U.S. department-store company said it will cut 7,000 jobs, eliminate executivesÔÇÖ merit increases for 2008, and trim its contribution to staff 401(k) retirement-savings plans. ┬á Government jobs are now also in jeopardy. The U.S. Postal Service plans to trim headcount through attrition and early retirement, and has asked lawmakers to allow it to reduce its six-days-a-week delivery schedule to pare expenses.  With fallout from the housing, credit and financial crises - the worst since the 1930s - ripping through the economy, analysts predict up to 3 million jobs will vanish this year - even if Congress quickly approves the stimulus measure, which has ballooned to more than $900 billion in the Senate. ┬á ÔÇ£WeÔÇÖre losing jobs at an alarming pace and bracing for more weakness,ÔÇØ Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis, said before the report. ÔÇ£The private sector is flat on its back at this point. The government needs to step in with a stimulus, the sooner the better.ÔÇØ  The House of Representatives last week passed an $819 billion stimulus package that includes tax cuts and infrastructure spending. The Senate is working on a plan that is closer to $900 billion.  ÔÇ£A failure to act and to act now will turn crisis into catastrophe and guarantee a longer recession,ÔÇØ Obama told lawmakers on Feb. 4 in Washington.