MICHELE NORRIS, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Michele Norris.
ROBERT SIEGEL, host:
And I'm Robert Siegel.
Wall Street ended on an up note today. The Dow closed up about 90 points and that's welcome news after a disastrous January. This week, the stock market saw its best gains in five years.
NORRIS: Good news in the markets, but some bad news on the jobs front today. economists have been looking for an increase of about 75,000 jobs in January. Instead, the Labor Department reported a net loss of about 17,000 jobs. It's the first time we've seen a decline in nearly four and a half years.
SIEGEL: Now, this is the first estimate on job creation; these numbers get revised two more times. But by all accounts, today's report was much weaker than expected.
Joining me now is NPR's Adam Davidson. Adam, what does this job loss mean, can you put in some context for us?
ADAM DAVIDSON: The number itself is not huge by the standards of these sorts of things. Seventeen thousand fewer jobs in January than in December. The big significant event is that it was negative; that there was job loss. We have not seen that since summer 2003, and we do not like to see job loss at all. That is a very strong sign that the economy, overall, is slowing down, is not expanding as we want to see.
Usually, you want to see about 100,000 new jobs every month as the economy grows, as the population grows. In the last few months, it's been much slower, maybe growth of around 80,000 or so. But seeing actual negative growth, that is a real turning point. That is a mark that something really wrong may be going on in the economy.
SIEGEL: How does it break down? Was there a job loss across the board or just in some parts of the economy? And any bright spots in the economy?
DAVIDSON: Bright spots - it's hard to find. There's areas that weren't as negatively affected. Health care and education happened to do pretty well. The biggest drop was in the construction industry, the housing industry. They lost 27,000 jobs on their own. That shouldn't be a surprise, this slowdown that we've been talking about is a housing-led slowdown. There's a crisis in the housing industry.
But what we're seeing is that it is spreading. That there has been not job loss, but a dramatic slowing in job gains throughout the economy - services, manufacturing. Government employees, particularly people employed by state government, lost jobs. There were 18,000 fewer state government jobs in January than there were in December. So it is spreading out of that housing industry into the rest of the economy.
SIEGEL: You told us earlier in the week that we'd be getting a lot of economic data throughout the week and that would give us a better picture of where the economy is heading.
So we've had a number of economic reports right now. Do we know? Do we think that we are, in fact, in recession or heading toward one right now?
DAVIDSON: It's still too soon to know for sure if we're in a recession. But what is clear is that we are in a rather dramatic, economic slowdown. And that might feel as bad to a lot of people as an actual technical recession.
SIEGEL: A technical recession would be two consecutive quarters of negative growth, would be the official definition.
DAVIDSON: That's the rule of thumb, yeah. We now know, as we've been discussing, employment numbers are down. The overall economy is measured by GDP - we learned on Wednesday that that was not negative, but was much lower than it has been of late. It is worth pointing out that we don't know for sure how grim the picture is. The data may well be revised. And also, if it's not revised, if we do learn that this is true, we've been through these recessions before or economic slowdowns before. We get out of them. We do survive.
But yes, today, Friday, things look a lot grimmer than they did on Monday. And things looked pretty grim on Monday.
SIEGEL: Would people in the markets looking at all these numbers assume we're going to get some more interest rate cuts from the Federal Reserve?
DAVIDSON: This certainly supports the idea that the Fed will lower interest rates, that the Fed will not be too nervous about inflation kicking in. And markets like that, because these numbers are looking into the past, into history. And markets are forward-looking, so if the Fed does cut rates that is likely to make the markets go up.
SIEGEL: Okay, Adam. Thank you.
DAVIDSON: Thank you.
SIEGEL: That's NPR's Adam Davidson in New York.
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.