Dec. 5, 2008 -- The American economy was dealt another brutal blow in November with the loss of a startling 553,000 jobs, the government announced today.
The number was much worse than Wall Street analysts had predicted. It was the largest monthly decline since December 1974 and it shows just how long and bad this recession has become. Since the start of the year American employers have shed 1.8 million jobs.
Just about every day, another company announces a big round of layoffs.
Just today, General Motors announced that it would fire another 2,000 workers in three car factories. Thursday, DuPont said it would cut about 2,500 jobs and AT&T Inc., the largest U.S. phone company, said it's eliminating 12,000 jobs.
"Today's job data reflects the fact that our economy is in a recession," President Bush said today.
"I'm concerned about our workers who've lost jobs during this downturn," he said. "As we work to address the problems in this economy, we've extended unemployment insurance benefits to those who have lost their jobs during this downturn."
To see the impact the recession is having on Americans, look no further than the Bexley family of Loveland, Colo.
In the past three months, mom was laid off from a home-building company, her son from a bar and grill, and now dad has lost his job at a medical-supply company.
"It was heart-crushing, really," said the mother, Emily Bexley, who was laid off in August. "I just I cried and cried and cried, because none of us have a job."
Father Bud Bexley lost his job last month.
"I kind of got a sick feeling in my stomach," he said. "I'm out looking for a job today, and delivering resumes, and just doing what you've got to do, I guess."
Dale Brandt lost his job as an aerospace scientist 11 weeks ago. At a job fair in Virginia today, he said he remained determined to find a position.
"It's stressful but you just have to keep pushing otherwise you're not going to get anything," said Brandt.
Andrea McCullum was one of 700 workers in Chicago today who turned out for 50 part-time positions driving a city bus.
"I'm just trying to take anything just to pay the bills," she said.
He's Got Too Much Work
There are a few people benefiting during this economy.
Larry, who asked that his last name not be used, processes unemployment claims for the state of California.
As the economy has sunk deeper into a recession, he has worked longer and longer hours to process all the claims. He now gets about 20 hours of overtime each week. That's been going on for nearly five months.
Now he is even working Saturdays to handle extra claims.
"I never, never mention it to people that I'm talking to on the phone, because they are unemployed," Larry said. "It's not a good situation."
Recently, he said, there is more panic in people's voices as they call up to seek government help.
Long-time employees now laid off are also finding a vastly different job scene.
"Looking for a job has changed," Larry said. You used to be able to walk into a company and fill out an application or mail in your resume. "Everything is over the computer or through e-mail now."
Unemployment Rate Jumps
The unemployment rate also shot up from 6.5 percent to 6.7 percent, the Labor Department said. It is the highest unemployment rate the country has seen since October 1993.
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.
The incoming Obama administration and Democratic-controlled Congress will almost certainly start fleshing out details of the Stimulus Act of 2009 in short order. Those in the know expect at least $1 trillion in direct fiscal stimulus during the next two years. It could be more; it's almost impossible for it to be less if lawmakers want it to be effective, according to the experts.
It also makes it that much more difficult for Congress and the Bush administration to turn the Detroit 3 away. They are currently in Washington begging for the $34 billion bailout. The estimate of jobs fallout if just one of the companies collapses is 2.5 million.