More jobs melt away; unemployment hits 7.2%
A staggering 2.6 million jobs disappeared in 2008, the most since World War II, and the pain is only getting worse with 11 million people out of work and searching.
The Associated Press
Analysis | Are the numbers reliable?
Economists agree that Friday's employment numbers were off the mark, likely underestimating the pain in the U.S. job market. Revisions accounted for 707,000 job losses so far for 2008, or 27 percent of the total.
Source: The Associated Press
WASHINGTON — By the hundreds of thousands now, Americans are getting the dreaded news: You've lost your job. And there's almost no place to land.
A staggering 2.6 million jobs disappeared in 2008, the most since World War II, and the pain is only getting worse with 11 million people out of work and searching. More than a half-million jobs evaporated in December alone, while unemployment hit a 16-year high of 7.2 percent and seemed to be headed for 10 percent or even higher by year's end.
Friday's government figures were "a stark reminder," said President-elect Obama, that bold and immediate government action is needed to revive a national economy that's deep in recession and still sinking.
The government estimated that 524,000 jobs melted away as winter took hold in December, and the true carnage will almost certainly turn out to be even worse when the figures are nailed down more clearly a month from now.
The unemployment rate zoomed from 6.8 percent in November, to 7.2 percent last month, the highest since January 1993.
"Behind the statistics that we see flashing on the screens are real lives, real suffering, real fears," said Obama, already moving full speed with Congress to put together an emergency revival plan a week and a half before taking office.
The severe recession, which just entered its second year, is already the longest in a quarter-century and is likely to stretch well into this year. The fact that the country is battling a housing collapse, a lockup in lending and the worst financial crisis since the 1930s makes the downturn especially dangerous.
All the problems have forced consumers and companies alike to retrench, feeding into a vicious cycle that Washington policymakers are finding difficult to break.
Investors, too. The Dow Jones industrial average fell 143 points Friday to end the week down nearly 5 percent, the worst week since November.
The Labor Department's unemployment report showed widespread damage across U.S. industries and workers — hitting blue-collar and white-collar workers, people without high-school diplomas and those with college degrees.
"One word comes to mind — dreadful," said Stuart Hoffman, chief economist at PNC Financial Services Group.
Employers also are cutting workers' hours and forcing some to go part time. The average workweek in December fell to 33.3 hours, the lowest in records dating to 1964 — and a sign of more job reductions in the months ahead since businesses tend to cut hours before eliminating positions entirely.
"There is no indication that the job situation would stabilize anytime soon," said Sung Won Sohn, economist at the Martin Smith School of Business at California State University. "This could turn out to be one of the worst economic setbacks since the Great Depression."
Economists predict a net total of 1.5 million to 2 million or more jobs will vanish in 2009, and the unemployment rate could hit 9 or 10 percent, underscoring the challenges Obama will face and the tough road ahead for job seekers.
All told, 11.1 million people were unemployed in December. An additional 8 million people were working part time — a category that includes those who would like to work full time but whose hours were cut back or those who were unable to find full-time work. That was up sharply from 7.3 million in November.
If those part-time employees, discouraged workers and others are factored in, the unemployment rate would have been much higher — 13.5 percent in December. That was the highest for that broader category in records going back to 1994.
Employment last month shrank in virtually every part of the economy — construction companies, factories, mortgage brokers, banks, real-estate firms, accountants and bookkeepers, computer designers, architects and engineers, retailers, food services, temporary help firms, transportation, publishing and waste management. The few fields spared included education, health care and government.
And corporate layoffs continue to pile up in the past week. In addition to Boeing's announced cut Friday of 4,500 jobs, drugstore operator Walgreen, managed-care provider Cigna, aluminum producer Alcoa, data-storage company EMC, inventory-tracking company Intermec and computer-products maker Logitech announced major layoffs to cope with the recession.
Associated Press reporter Christopher Leonard in St. Louis contributed to this story.
Copyright © 2009 The Seattle Times Company
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