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U.S. loses jobs for first time in 4-1/2 years Glenn Somerville WASHINGTON (Reuters) - U.S. employers cut payrolls for the first time in 4-1/2 years in January, the government said on Friday, though a later report showing a modest revival in manufacturing activity took some sting from the job losses. Financial markets were whipsawed by the contrasting signs of strength and strain in the economy, with stocks basically unchanged at mid-morning, U.S. Treasury debt prices up slightly and the dollar flat. "The economy is very weak. It's on the edge of recession but the data are mixed enough so that you can't say a recession has begun," said Stuart Hoffman, chief economist for PNC Financial Services in Pittsburgh. "It's hanging by a thread but it hasn't been cut yet."
The Labor Department said 17,000 jobs were cut last month, sharply contrary to Wall Street analysts' forecasts that 80,000 new jobs would be created. December's new-job total was revised up to 82,000 from 18,000 but October and November were revised down. At mid-morning, the Institute for Supply Management said its index of national factory activity rose to 50.7 in January from 48.4 in December, a sign of expansion. Consumer sentiment also rose, according to a Reuters/University of Michigan Survey, though not as much as had been forecast. A separate report from the Commerce Department showed, not surprisingly, that construction spending dropped 1.1 percent in December and was led lower by a fall-off in new-home building. Sales, construction and prices of both new and previously owned homes are in sharp decline with no early end in sight. Some analysts, while acknowledging the data was mixed, said the soft jobs number showed the economy was in deep trouble. "We are on the brink of a recession now," said Daniel North, chief economist for Euler Hermes ACI in Owings Mill, Maryland. "The job market is always a lagging indicator. This is a nail-in-the-coffin."
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