Jobless Rate Spikes Up in January

W A S H I N G T O N, Feb. 2 -- The nation’s unemployment rate climbed to 4.2percent in January, the highest level in 16 months, as the dramaticslowdown in economic growth forced thousands of layoffs in autosand other manufacturing industries.

The nation's jobless rate rose 0.2 percentage point from a 4percent rate in December, the biggest one-month jump since April1999, the Labor Department reported today. The unemployment ratelast stood at 4.2 percent in September 1999.

Manufacturing was the hardest-hit sector, losing 65,000 jobslast month and bringing total factory losses to a quarter millionsince June.

Labor Secretary Elaine Chao called the unemployment outlook"troubling," saying it underscores the need for President Bush's10-year $1.6 trillion across-the-board tax cut to help bolstereconomic growth.

"President Bush's tax cut will allow workers to keep more oftheir paychecks — helping workers, families and the economy," shesaid in a statement. "The President's tax cut is the answer tostimulate the economy and head off further unemployment, but itmust be passed soon to have needed impact."

Strong Signs of SlowdownThis huge job decline is seen as evidence that manufacturing isalready in a recession. Some analysts have begun to express fearsthat this weakness could spread and end the nation's record-long10-year stretch of uninterrupted growth.

In another report, orders to U.S. factories rose 1.1 percent inDecember. The figure reflected a big jump in demand for airplanesand other transportation equipment, masking weakness elsewhere inthe report.

Excluding transportation, orders fell 0.8 percent to theirlowest level since April, the Commerce Department said.

Orders were down sharply for computers, office equipment andcommunications products. Primary metals, including steel, postedthe largest drop since October 1998. Shipments, a barometer ofcurrent production, fell by 0.2 percent, the fourth straightmonthly decline.