Job Losses Mount as Economic Picture Worsens

Record numbers of homeowners are falling behind on mortgage payments and the U.S. economy is losing jobs at an alarming rate with companies big and small slashing their work force.

Graphic charts monthly unemployment rate for the past 15 years; 1 c x 2 1/2 in; 46.5 mm x 63.5 mm

(AP)

A half-million American jobs disappeared month, the worst mass layoffs in more than three decades, as the nation spiraled downward in what could be the hardest hard times since the Great Depression.

Bush administration officials said Friday night that the White House is considering telling Congress as early as next week that it wants to tap the unused $350 billion of the financial industry bailout. It was not immediately clear how the administration might use the money.

General Motors, one of the Big Three automakers that went to Congress this week for a second time with hat in hand, announced it was cutting even more jobs.

"The economy is in a free fall," said Richard Yamarone of Argus Research. "It is as if someone flicked off the switch on hiring."

Despite the gloom, investors found a silver lining, betting that so much bad news would force fresh government action to revive the foundering economy. The Dow Jones industrial rose 259 points.

But economists, staring at 533,000 lost jobs, were anything but hopeful. Since the start of the recession last December, the economy has shed 1.9 million jobs, and the number of unemployed people has increased by 2.7 million — to 10.3 million now out of work.

Some analysts predict 3 million more jobs will be lost between now and the spring of 2010 — and that the once-humming U.S. economy could stagger backward at a shocking 6 percent rate for the current three-month quarter.

"It's a mess," said Mark Zandi, chief economist at Moody's Economy.com. "Businesses, battening down the hatches, are concerned about their survival and are cutting workers."

President-elect Barack Obama said the crisis "is likely to get worse before it gets better," and no one was going to argue that point. Economists predicted the unemployment rate, which rose to a 15-year high of 6.7 percent in November, could soar as high as 10 percent before skittish employers begin hiring again.