January Job Loss a New Sign of Economic Woes
RENEE MONTAGNE, Host:
Joining us now to make sense of it all is NPR's Adam Davidson. And overall, Adam, this is a very weak report.
ADAM DAVIDSON: Although I should note these numbers are often revised later, so it might not be as bad as it sounds.
MONTAGNE: Now, I just reported that the unemployment rate fell. But that is a little confusing. If the number of jobs fell, wouldn't the unemployment rate go up?
DAVIDSON: Some economists say it's actually a bad sign when the jobs number goes down and the unemployment rate goes down because that will - what that tells you is that there are at least some people in the economy who are so depressed about the future, they're not even bothering to look for jobs. Although it's hard to know how many of those people we're talking about.
MONTAGNE: So does this report validate the Fed's dramatic rate cuts over the past couple of weeks?
DAVIDSON: It's so hard to do that job. It's so hard to know where we are in the cycle, where we are in the slowing cycle. But they do have data that the rest of us don't have, and this does seem to validate their choice.
MONTAGNE: And can we now say that the economy has slowed down so much that there was a net loss in jobs and thus we must be in a recession?
DAVIDSON: We can't say that yet. A real recession, you're talking about a hundred thousand, 200,000 jobs lost each month, the payroll number falling much more than it did last month. So this is a sign of a clearly slowing economy. It may be the first harbinger of a recession. But it is not yet a recession.
MONTAGNE: Adam, thanks very much.
DAVIDSON: Thank you, Renee.
MONTAGNE: And here's another story we're following today. Microsoft is making a big play for Yahoo. The company is offering almost $45 billion in cash and stock to buy the Internet giant. It's an unsolicited takeover bid, and if the deal goes through, it would be a significant challenge to Google, the company that dominates the online search and advertising markets.
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