US November job losses reach 34-year high

Friday, December 5, 2008

The United States Labor Department reported that U.S. employers cut 533,000 jobs in November, the largest such monthly cut in 34 years. In another indication of the worsening economic situation in the U.S., the unemployment rate reached a 15-year high of 6.7 percent, from 6.5 percent in October.

American President George W. Bush talks about the economy on Dec. 5, 2008.
Image: White House photo by Chris Greenberg.

It was the largest job loss in a single month since December 1974, when 604,000 jobs were cut.

More job cuts have been announced since these figures were compiled, with 12,000 job cuts expected at telecommunications company AT&T. The economy has now lost 1.26 million jobs in the past three months, after 403,000 jobs were lost in September and a further 320,000 in October. Job losses since the beginning of 2008 total 1.91 million.

The job losses were "much worse than expected," said Peter Morici, a business professor at the University of Maryland. "The threat of widespread depression is now real and present," he added. "Factoring in discouraged workers, unemployment is closer to 8.7 percent. Add in part-time positions that cannot find full-time employment, and the hidden unemployment rate is nearly 13 percent."

The Wall Street stock market reacted to the news negatively: the Dow Jones Industrial Average lost 171 points in the first thirty minutes of trading, going down to 8,206 points. The other two major indexes, the Nasdaq Composite and the S&P 500, also lost ground.

The U.S. gross domestic product in the fourth quarter is projected to drop by as much as five percent at an annual rate, according to IHS Global Insight. An unemployment rate of nine percent has been predicted by Goldman Sachs.