Jobless Rate Rises to 6.7% as 533,000 Jobs Are Lost
With the economy deteriorating rapidly, the nation's employers shed
533,000 jobs in November, the 11th consecutive monthly decline, the
government reported Friday morning, and the unemployment rate rose to
The decline, the largest one-month loss
since December 1974, was fresh evidence that the economic contraction
accelerated in November, promising to make the current recession,
already 12 months old, the longest since the Great Depression. The previous record was 16 months, in the severe recessions of the mid-1970s and early 1980s.
have recorded the largest decline in consumer confidence in our
history," said Richard T. Curtin, director of the Reuters/University of
Michigan Survey of Consumers, which started its polling in the 1950s.
"It is being driven down by a host of factors: falling home and stock
prices, fewer work hours, smaller bonuses, less overtime and
The jobless rate was up from 6.5 percent in
October. The job losses far exceeded the 350,000 figure that was the
consensus expectation of economists.
Over all, the job losses
since January now total more than 1.9 million, with most coming in the
last three months as consumers and businesses cut back sharply in
response to the worsening credit crisis.
The report on Friday by the Bureau of Labor Statistics
included sharp upward revisions in job-loss figures for October (to
320,000 from the previously reported 240,000) and for September (to
403,000 from 284,000).
The employment report increased the likelihood that Congress, with the support of President-elect Barack Obama, will enact a stimulus package
by late January that could exceed $500 billion over two years. More
than half that money would probably be channeled into public
infrastructure spending. Many economists consider such investments an
effective way to counteract, through federally financed employment, the
layoffs and hiring freezes spreading through the private sector.
$100 billion of public investment in such things as roads, bridges and
levees would generate two million jobs," Robert N. Pollin, an economist
at the University of Massachusetts, said. "That would offset the two million jobs that we are now on track to lose by early next year."
manufacturing sector has been particularly hard hit, losing more than
half a million jobs this year. That is nearly half the 1.2 million jobs
lost since employment peaked in December and, in January, began its
uninterrupted decline. The cutbacks seem likely to accelerate as the
three Detroit automakers close more factories and shrink payrolls even
more as they try to qualify for the federal loans they asked Congress
this week to approve.
While manufacturing has led the way, the
job cuts are rising in nearly every sector of the economy. "My sense is
there is just a collapse in demand," said Marc Levinson, research
director for the union Unite Here, whose 450,000 members are spread
across apparel manufacturing, hotels, casinos, industrial laundries,
airport concessions and restaurants. "Our members are being laid off
big time," Mr. Levinson said.
The latest jobs report came
during a week of compelling evidence that the American economy is
falling precipitously. On Monday, the National Bureau of Economic Research ruled that a recession - the 12th since the Depression - had begun last December, even earlier than many people had thought.
That news was followed by fresh reports of cutbacks or declines in
construction spending, home sales, consumer spending, business
investment and exports. And companies in every industry sector
announced layoffs this week, including AT&T, the telecommunications company, with 12,000 job cuts; DuPont, the chemical company, 2,500; and Viacom, the media company, 850.
Even retail sales in the Christmas season were off sharply. The
International Council of Shopping Centers on Thursday described
November sales at stores open at least a year as the weakest in more
than 30 years.
With all this in mind, and particularly the shrinking employment rolls, economists are estimating that the gross domestic product
is contracting at an annual rate of 4 percent or more in the fourth
quarter, after a decline of 0.3 percent in the third quarter.
G.D.P. forecast for 2009 is now minus 1.8 percent, rather than minus 1
percent," HIS Global Insight, a forecasting and data gathering service,
informed its clients in an e-mail message this week, explaining that
all the latest bad news left it no choice but to issue a sharp downward
"We see the unemployment rate at 8.6 percent by the end of 2009," Global Insight said.