U.S. Jobless Rate Soars as Payrolls Plunge by 598,000 (Shobhana Chandra)

  Feb. 6 (Bloomberg) -- The unemployment rate reached the highest level since 1992 and payrolls tumbled in January, with millions more losses likely until a fiscal stimulus and emergency lending programs begin to temper the U.S. economy’s freefall.

  The jobless rate rose to 7.6 percent from 7.2 percent in December, the Labor Department said today in Washington. Payrolls fell by 598,000, the biggest monthly decline since December 1974. Losses spanned almost all industries, spanning from construction and manufacturing to retailing, trucking, media and finance.

  “We are in the middle of a very severe, a violent, collapse in activity and it could go on for months,” James Galbraith, an economics professor at the University of Texas in Austin, said in an interview with Bloomberg Television. The report will likely diminish objections “that somehow the president’s recovery plan is too large and should be trimmed back.”

  Obama, who predicted a “dismal” report, is trying to push lawmakers to approve a package of about $900 billion, and in three days plans to announce a new effort to shore up credit markets. The rate of the job market’s decline means it’s unlikely the steps will halt a collapse in consumer spending until the second half of the year, economists said.

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