U.S. employers cut 17,000 non-farm jobs in January, the first time in nearly 4 1/2 years that U.S. payrolls shrank as continuing losses in construction and manufacturing reflected the economy’s waning momentum, several news services reported following the release today of the Labor Department’s January employment summary.

The Labor Department report came in much weaker than anticipated by analysts surveyed by Reuters, who had forecast 80,000 jobs would be added last month.

The department revised December’s new-job total up to 82,000 from 18,000, but cut its estimates for hiring in both October and November, suggesting that hiring was already in decline as 2007 ended.

January marked the first job losses since August 2003, and some analysts said it painted a picture of a declining economy.

“We are on the brink of a recession now,” said Daniel North, chief economist for Euler Hermes ACI in Owings Mill, Md. “The job market is always a lagging indicator. This is a nail-in-coffin.”

After the release of the report, the U.S. dollar fell sharply against other major currencies. U.S. equity index futures pared their big earlier gains and U.S. government debt prices cut earlier losses.

Jobs disappeared across a broad spectrum of professions, with the steepest losses coming in the manufacturing, construction and goods-producing industries, the New York Times reported.

With the downturn of the housing market, trouble on Wall Street and the continuing fallout of the subprime mortgage crisis, many economists have pointed to the continued growth in the labor market as the final holdout in a sluggish economy, the newspaper said.

The Commerce Department reported that construction spending dropped 1.1 percent in December — twice what analysts expected and the most in 15 months.