Job Losses Mount As Recession Deepens
According to a report released by the Labor Department today, the U.S. economy shed over half a million jobs in November, the most job losses in a single month since 1974. This is now the eleventh straight month where employment has declined and the rate of job losses has accelerated over the past three months.
Nonfarm payroll employment fell sharply (-533,000) in November, and the unemployment rate rose from 6.5 to 6.7 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. November’s drop in payroll employment followed declines of 403,000 in September and 320,000 in October, as revised. Job losses were large and widespread across the major industry sectors in November.
Both the number of unemployed persons (10.3 million) and the unemployment rate (6.7 percent) continued to increase in November. Since the start of the recession in December 2007, as recently announced by the National Bureau of Economic Research, the number of unemployed persons increased by 2.7 million, and the unemployment rate rose by 1.7 percentage points.
The job situation is expected to be a top priority for the incoming administration, where one of the first acts of the new Congressional session will be the enactment of a new stimulus package. At this point many believe it will rival, if not surpass the $700 billion financial rescue package passed in October.
The situation will only grow worse in the near future as there are many major companies struggling with the credit crunch. Many eyes will be watching for a possible auto industry bailout because the failure of one or more of those companies could see the unemployment rate skyrocket if that were to happen.
Even the most optimistic of analysts don’t believe a recovery will happen until at least the end of next year. Even after a recovery occurs, it will be a time of major restructuring in many sectors, which will probably see a lot of merger and acquisition activity once credit availability returns to somewhat normal levels.
It could very well be at least another two years until we see the employment picture improve once again. However, if we do realize the worst economic downturn since the Great Depression, as many believe is the case, the situation will likely take even longer to improve.
