The American economy lost 533,000 jobs in November, the most in 34 years. The unemployment rate shot up to 6.7 percent, the highest in 15 years. The last time that job losses in a single month were this bad or worse was in December, 1974.
The chart below provides a picture of how the recession has deepened throughout the year.
source: Bureau of Labor Statistics
If anyone had doubts about the severity of the recession that began at this time last year, there are none left. The current slowdown points to a more bad news for the United States and the rest of the world as the continuing economic crisis searches for a bottom that appears to be far lower yet.
Almost no sector in the economy was spared. Cutbacks hit factories, often the highest paying jobs, construction companies, financial firms, retailers, leisure and hospitality, and others. Government and health services were two of the few who did not post job losses.
The forecast for losses in November had been 320,000, so economists were show to have missed the mark by more than 66%, a sure sign that the severity of the recession far exceeds general expectations.
Job losses in September and October also turned out to be much worse. Employers cut 403,000 jobs in September, versus 284,000 previously estimated. Another 320,000 were chopped in October, compared with an initial estimate of 240,000.
The recession is going to be the Grinch who stole Christmas, deepening as the holiday season nears. With high unemployment, gift giving is likely to be pared back by many consumers.
Investor sentiment will also reflect this reality, and further pressure will be placed on the stock markets around the world. Within five minutes after the opening bell on Friday, the Dow Jones Industrial Average was down over 100 points.
My fear of unemployment as high as 10% was buttressed by today's news. A bottom of for this recession seems far away.
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