America has awoken in January to face a new economic crisis – unemployment. The first month was marked by 17,000 job losses. Employment growth is predicted to continue.
Instead of 70,000 new jobs the Labor Department reported about new losses, thus making the Fed to keep cutting rates.
The Federal Reserve has started a new rate-cutting activity to suppress the unemployment growth and possible economic recession.
Congress decided to take action about the state of the economy by developing an economic stimulus plan worth of 150 billion dollars.
The main reasons of such recession are a housing slump and the unstable state of dollar.
The statistics is following:
- construction industry - 27,000 job losses
- manufacturing industry - 28,000 job losses
- professional and business services companies - 11,000 job cuts.
On the whole the US economic growth slowed to 0.6 percent in the fourth quarter of the year.
The new crisis seemed to have crept into major banks, such as Citigroup and Lehman Brothers, and ailing mortgage companies.