Agencies cut thousands of jobs in January

Alan Krueger, chair of the White House Council of Economic Advisers Alan Krueger, chair of the White House Council of Economic Advisers Carolyn Kaster/AP

Federal agencies shed 5,000 jobs in January, the Bureau of Labor Statistics reported Friday.

On the whole, government, including the state and local sectors, lost 9,000 jobs during the month. Further losses may be on the horizon, with budget sequestration that would cut tens of billions of dollars from agency budgets looming at the end of February. Several federal agencies already have implemented hiring freezes in anticipation the sequester could go into effect.

"Today’s report is a reminder of the importance of the need for Congress to act to avoid self-inflicted wounds to the economy," said Alan B. Krueger, chairman of the Council of Economic Advisers. "The administration continues to urge Congress to move toward a sustainable federal budget in a responsible way that balances revenue and spending, and replaces the sequester, while making critical investments in the economy that promote growth and job creation and protect our most vulnerable citizens."

Outside of government, the overall economy continued to add jobs at a slow but steady pace.Total nonfarm employment increased by 157,000 in January. The White House noted that the private sector now has added jobs for 35 straight months. 

Notable increases occurred in retail trade, construction, health care and social assistance, professional and business services, and restaurants and bars.

Nevertheless, the unemployment rate edged up slightly, from 7.8 percent to 7.9 percent.

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