Recession in the US is going to be long and deep as officials of Bureau of Labor Statistics on Capitol Hill said bluntly that the November labour report is one of the worst job reports that the Labor Bureau has ever repoted with 533,000 jobs lost in November, the worst since the recession of 1974 and taking the tally to 1.9 million jobs lost this year.
The loss of 533,000 jobs in a single month is far worse than what analysts had predicted; not only are the job losses higher than expected, but have spread to almost all parts of the US economy, barring health care and government employment.
November's drop in payroll employment follows September's decline by 403,000 and the revised figure of 320,000 for October and as of November the total unemployment figure had reached 10.3 million, while the number of employed was 144.3 million.
Over the past 12 months, unemployment has increased by 2.7 million, with the and the rate shot up from 6.5 per cent in October to 6.7 per cent last month, which is a 15-year high.
Job losses last month were widespread, affecting factories, construction companies, financial firms, retailers, leisure and hospitality, employment services and other industries. The only place left unscathed but gained was government, education and health services.
Last month, the main culprits for job losses were AT&T, Credit Suisse, DuPont, Avis Budget, NBC Universal, Honda Motor, Viacom and Windstream among others.
Union workers representing 300 workers of Republic Windows & Doors in Chicago went on a strike after the company closed down abruptly giving employees three days notice instead of the mandatory 60. It owes each employee approximately $3,500 including unused vacation pay.
As the National Bureau of Economic Research said last week that recession started a year back and agreed by President Bush and with President-elect, Barack Obama saying that there were no quick fixes for the economy but said public spending was the best way to get the dead economy moving again.
In November, employment continued to decline in manufacturing 85,000, with widespread job losses occurring among the component industries with 604,000 jobs being lost since last December.
In transportation, motor vehicle and parts lost 13,000 while in the nondurable goods component, job losses of 12,000 occurred in plastics and rubber products, printing and related support activities lost 5,000, and textile mills 5,000.
Employment in construction fell by 82,000 in November, with losses occurring throughout the industry. Since peaking in September 2006, construction employment has decreased by 780,000.
Within professional and business services, the employment services industry lost 101,000 jobs over the month, bringing total job losses since December to 495,000. In November, employment fell by 10,000 in architectural and engineering services.
Employment in retail trade fell by 91,000 in November. Job losses continued in automobile dealerships by 24,000 and job losses in this industry have fallen by 115,000 since December, with much of the decrease occurring over the last 2 months.
Employment in leisure and hospitality declined by 76,000 in November, with 54,000 occurring in accommodation and food services jobs.
Job losses continued to occur in financial activities as this industry shed 32,000 last month and credit intermediation and related activities lost 16,000 while 9,000 were lost in rental and leasing services.
Elsewhere, in the service-providing sector, employment in transportation and warehousing lost 32,000 jobs in November.
With consumer demand drying up and banks tightening its lending standards, companies are cutting jobs in a bid to conserve profits or minimize losses and many analysts believe that the government has got to provide fiscal and monetary boost to get the gross domestic product growing again.
But economists were stunned by the range of fourth-quarter job losses, which has even hit the retail sector at a time when stores and malls make the most money and hire more hands during the up coming holiday season.
Because of the increase in unemployment, the federal government had earlier this year added a 13-week emergency federal benefits extension, and recently approved a second 7-week emergency extension.
One analyst said that the demand for labor is always driven by consumers' demands for the goods and services employers provide but the ordinary American consumer after decades of spending recklessly is now under great stress and is finally holding back on spending leading to lower consumer demand thereby inflicting more losses in the job scenario.
The US Mortgage Banker's Association has reported that a large number of borrowers fell behind on their payments in the third quarter with nearly 7 per cent of mortgage loans were in arrears, while a further 2.97 per cent were at some stage of foreclosure process.
Several analysts have also cut earnings estimates for credit-card companies such as Discover Financial Services, American Express and Capital One and banks last week on the basis of consumer credit losses amid rising unemployment.