Employers cut 533,000 jobs in Nov., most since 1974

WASHINGTON -- Employers slashed jobs at the swiftest pace in 34 years in November, leading the unemployment rate to rise to 6.7% from 6.5% in October and the highest in 15 years, the government said Friday. Speaking after the report, President Bush used the word "recession" for the first time to describe the economy's state.

The report points to a rapidly deepening recession. The unemployment rate was held down as discouraged workers dropped out of the job pool.

Adding in those who have given up looking for work and people working part time because they can't find full-time work, unemployment was 12.5% in November, up from 11.8% in October and highest since the department began tracking the number in 1994.

The monthly employment report includes figures from a household survey, which produces the unemployment rate, and a survey of businesses, which produces the payroll jobs numbers.

That survey showed that businesses cut 533,000 jobs last month, seasonally adjusted, the most since December 1974, when the USA was in the midst of a severe recession, and far greater than the 320,000 jobs lost in October. Employers cut more than 1.9 million jobs in the first 11 months of 2008.

More than 10.3 million Americans were unemployed in November, the most in 25 years.

"This is almost indescribably terrible," High Frequency Economics chief U.S. economist Ian Shepherdson said in a note to clients. He says in the past six months, employers have cut 1.55 million jobs, almost as many as were cut in the 2001 recession.

Bush told reporters: "Our economy is in a recession. This is in large part because of severe problems in our housing, credit and financial markets, which have resulted in significant job losses."

The White House did not use the term until Monday, when a panel for the National Bureau of Economic Research gave official word that the economy is in a recession and has been since last December.

Bush expressed deep concern for Americans who have lost jobs, but also said there are some encouraging signs about the credit markets.

"There is still more work to do," he said. "My administration is committed to ensuring that our economy succeeds."

Job cuts were widespread, with alarming declines in the services sector of the economy, which had largely been holding up in 2008. Among the largest:

• Retailers cut 91,300 jobs, including 24,200 at automobile dealerships.

• Manufacturers cut 85,000 employees.

• Construction companies cut 82,000 workers.

• Temporary help firms cut 78,200.

• Companies in the leisure and hospitality sector cut 76,000 employees, including 36,600 hotel workers.

On a positive note, education and health care companies added 52,000 workers in November, and federal, state and local governments added 7,000.

The job market is unlikely to improve any time soon. In a survey of 101 CEOs released Thursday, 60% said they plan to cut workers in the next six months, the Business Roundtable said.

The data are likely to add momentum to efforts in Washington to enact a large fiscal stimulus package, which could include money for infrastructure, such as roads and bridges. Congress last month extended unemployment benefits for the second time this year.

"This jobs picture painted today is staggering, and it should be all the evidence Washington needs to act swiftly and decisively to shore up this economy," says Sen. Charles Schumer, D-N.Y.

The jobs numbers are also likely to add support for an interest rate cut at the Federal Reserve when policymakers meet Dec. 15-16. The Fed's target for short-term interest rates is already at 1%, a multi-decade low.

The news comes as other data point to a rapidly deteriorating economy. Earlier this week, reports showed big drops in activity in the manufacturing and services sector. The National Bureau of Economic Research said the USA is in a recession that began in December 2007, making the current downturn already longer than the 2001 and 1990-91 recessions, the country's most recent.