Finding a New Job Becomes Harder as Layoffs Mount

"Workers getting laid off are not going to get hired any time soon," said John Silvia, chief economist at Wachovia.

A sign instructs job seekers at the California Employment Development Department in Sunnyvale,...

A sign instructs job seekers at the California Employment Development Department in Sunnyvale, Calif., Tuesday, Jan. 6, 2009. The country lost nearly 2 million jobs through November and more bad news is expected this week when the government releases data on weekly jobless claims and December unemployment. No matter how bad those numbers are, and economists expect at least another 500,000 jobs were lost last month, the pain is stretching into 2009. (AP Photo/Marcio Jose Sanchez)

(AP)

Some economists believe the number of people drawing unemployment benefits could rise as high as 5.5 million this year — even if a new government stimulus package is enacted.

President-elect Barack Obama called for a bold approach to revive the moribund economy.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said Thursday, the fourth straight day he talked about the economy, the No. 1 concern of most Americans.

"If nothing is done, this recession could linger," Obama warned. "The unemployment rate could reach double digits."

With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, which would be the highest in 15 1/2 years. The government releases that report Friday.

Obama, who takes over Jan. 20, is championing a massive package of tax cuts and government spending that could total $775 billion over two years. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say.

With jobs disappearing, shoppers held tight to their wallets and pocketbooks at the end of 2008. The Federal Reserve said Thursday that consumers cut back on their borrowing on credit cards, and for such things as auto loans, at an annual rate of $7.94 billion in November, the biggest decline in 65 years of record keeping.

And retailers on Thursday reported dismal sales figures for December. Even Wal-Mart Stores Inc. finally buckled under the pressure of the sinking economy, with its sales rising less than analysts had expected. Among the many retailers that reported steep sales declines were Sears Holdings Corp., which operates Kmart and Sears stores, luxury retailer Saks Inc. and Gap Inc.

Consumers and companies are folding under the forces of the collapsed housing market, a global credit crunch and the worst financial crisis since the 1930s. The recession, which started in December 2007, already is the longest in a quarter-century.