As the recession deepens and consumers and companies cut back spending, American businesses are slashing jobs to try to remain profitable.
The jobs losses have been widespread with just about every industry affected. Large layoffs have been seen in manufacturing, construction, financial firms, retailers, travel and leisure and hospitality. Health care remains one of the few fields where jobs are holding their own, if not growing. Education and government jobs were also bight spots in an otherwise dismal report.
In real terms, unemployment rates this high mean that more than 10 million of us are looking for work but simply cannot find it. That's an additional 2.7 million people who have been actively looking for jobs but have not found them since the beginning of the recession.
The last three months, coinciding with the ongoing world financial crisis, have been dismal -- the average monthly jobs loss was 419,000 -- as American companies have faced a perfect storm of economic collapse.
The consumers they sell to have tightened their pocketbooks. Banks and commercial lending markets they rely on to stock the shelves and pay their employees have not been functioning. They have no choice but to cut back -- big and fast.
As bad as it is now, economists fear, with credit at a standstill and consumers barely spending, that worse is on the way.
"You could easily envision unemployment continuing to rise all through 2009 into 2010," said Dean Baker of the Center for Economic Policy and Research. "It could cross 10 percent which would really be a disaster for tens of millions of people and that's a plausible scenario."
Florida, which used to lead the nation in job growth, has suffered tremendous job losses --156,000 gone in the last year alone. With the collapse of the housing market and significant drop in new buildings, construction has suffered tremendous blows. Tourism has also been hit hard. Westgate Resorts, one of Florida's biggest employers, has laid off nearly 25 percent of its employees since September.
In Seattle, the diverse economy is being affected across the board – from the highest-paying white-collar jobs to blue-collar workers. The failure of Seattle-based Washington Mutual has sent a ricochet of layoffs across the spectrum. Even Starbucks, whose headquarters are based in Seattle, is feeling the burn, laying off workers from the company's headquarters.
Today's report presents an almost unprecedented challenge to the nation: How, in a world driven by credit and the consumer, do you counter the credit crunch and record-low consumer credit?
Even the most conservative economists are now saying the government must create a massive stimulus program with all due haste. And interest rates have to be almost zero -- money should be almost free to entice qualified borrowers, though gladiator capitalists have retreated to the sidelines.
The Federal Reserve System will almost certainly lower a key federal interest rate below the historic low 1 percent where it sits now. The governors meet in a two-day session Dec. 15-16 to craft their response to today's report. Could Bernanke & Co. be considering a cut before the meeting? They could. They've done so twice already this year.