Job Growth Slows

The U.S. growth of jobs has slowed more than had been expected.

U.S. payrolls contract by 17,000 in January

WASHINGTON (MarketWatch) -- U.S. employers cut back their hiring in January for the first time in more than four years, government data released on Friday showed, perhaps providing the smoking gun showing that the economy has entered a recession.

Nonfarm payrolls fell by an estimated 17,000 in January, the Labor Department said. This is the first decline since August 2003.

The nation's unemployment rate fell to 4.9% from 5%.

The decline in payrolls was much weaker than the 85,000 increase that had been expected by Wall Street economists surveyed by MarketWatch.

This is a solid indicator that the economy is entering into a recessionary period. But before we start looking for bread lines, remember that even a 4.9% unemployment rate is significantly less than most of Europe right now. Here is some detail on employment by sector:

Manufacturing jobs declined by 28,000, the biggest drop since August. Factory jobs have fallen for 19 straight months. Over the past year, manufacturing has lost 269,000 jobs.

Construction jobs fell by 27,000 for the seventh straight monthly decline. Construction has lost 284,000 jobs since its peak in September 2006.

Financial sector employment fell by 2,000 in January, with declines in many sectors. Real estate shed 5,000 jobs. The mortgage sector has lost 111,000 jobs since October 2006.

Jobs in services increased 34,000, as retail jobs rose 11,000. Health care had a large increase of 27,000 jobs. Over the past year, the health sector has added 367,000 jobs, accounting for more than one-third of the growth in payroll employment.

Government lost 18,000 jobs in January. This means that the private sector eked out a slim gain of 1,000 jobs in the month.

Bottom line is that service jobs and the health sector grew, everything else contracted. I expect the Democrats to start talking about the "worst economy in 50 years" any minute now.