November: Most Job Cuts in 34 Yearsby Tim Manni
Recently we’ve avoided writing about monthly-job reports because of their sheer bleakness. But November’s numbers are quite startling and seemingly unavoidable. The U.S. Labor Department reported this morning that 533,000 Americans lost their jobs in November — the largest single month of downsizing since December 1974. With the unemployment rate currently at 6.7%, employers have cut 1.9 million payrolls since the beginning of the year. Two-thirds of those job cuts have occurred in the last three months.
Throughout the early portion of the year, job losses had been more concentrated around certain sectors of the economy like manufacturing and construction. As the numbers have progressively gotten worse, and the recession has spread into nearly every facet of our economy, payroll cuts have affected nearly every employment sector:
Losses were broad-based. Sinking building and manufacturing led to the elimination of 163,000 jobs, while weak retail spending led to a decline of 91,000 in retail payrolls as stores held off on seasonal hiring. Likewise, weak expectations for the economy resulted in declines of 78,000 in temp help. However, losses were large and, more importantly, increasing across industries.
With weekly claims for unemployment insurance ranging from 484,000 on November 1, to 509,000 on November 29, why had economists predicted job losses of only 350,000? Forecasting is more of an art than a science, but available evident suggested that 350,000 was far too optimistic, said HSH Vice President Keith Gumbinger.
Unemployment numbers are a delayed statistic, reflecting prior downturns in business activity. The latest job losses are likely the result of August, September, and October’s economic troubles. The increasingly harsh numbers are the result of thousands of companies struggling mightily throughout the beginning and middle of the year. Without sounding too despondent, recent reports of big businesses like AT&T laying off thousands of workers will only continue to increase the unemployment numbers in coming months.
Expect this report to add fuel to President-elect Obama and Democratic lawmakers’ fire for the need for a grand stimulus package aimed at rejuvenating our infrastructure. Also, the numbers could influence the opinion of the downstream-job loss severity if the Big Three go under.