US employment down – a serious sign of slowdown

US employers cut 17,000 jobs from their payrolls in January, US Labor Department figures showed. Economists had been expecting a rise of 80,000.  If this figure proves to be in line with actual events (after adjustments), it shows severe declines in economic activity in the US.  There has been modest wage inflation over the past few years so there is pressure for wage increases.  The combination of declining employment and upward wage pressure makes for a very uncomfortable economy, with potentially volatile political implications especially in an election year.