We haven’t experienced tough times like we are about to embark upon.
It is the biggest one-month job loss since January of 1974.
The loss brought the nation’s unemployment rate up to 6.7%, up from a revised October unemployment rate of 6.5%. The unemployment rate is the highest its been in about 15 years.
The number was much worse than the Wall Street economists’ estimates, who were on average looking for a loss of 325,000 jobs for the month according to data provided by Thomson Reuters.
On top of large November loss, the U.S. Labor Department said the nation lost an additional 200,000 jobs in the months of October and September — bringing the total job loss in this report to nearly three-quarters of a million people.
“This is almost indescribably terrible,” said Ian Shepherdson, Chief U.S. Economist with High Frequency Economics.
Nearly all sectors lost jobs during the November period, the Labor Department said. Construction jobs fell by 82,000 during the month, while service sector jobs dropped by a massive 370,000 jobs. The professional and business service sector lost 136,000 jobs, while manufacturing firms shed 85,000 jobs last month as well.
Economists noted that the sectors that lost the most jobs were mostly the high-paying, high-quality jobs that both Wall Street and the U.S. government is looking for.
“You’re now hitting at the core of American business,” said John Silvia, Chief U.S. Economist with Wachovia. Silvia is expecting the nation’s unemployment rate to rise to as much as 9% by the time this recession is over.
The only sectors where jobs were created last month were in education and health services, which created 52,000 jobs last month, and in government, where 7,000 jobs were created last month as well. Education, health and government are considered recession-resistant professions and do not tend to shed jobs in times of economic slowdowns.
Siliva and Shepherson both noted that if education, health and government were removed from the 533,000 headline number, the number of jobs lost in November were considerably worse.
Since the recession began in December last year, more than 1.9 million jobs have been lost, the Labor Department said.
The average hourly wage rose by a seven cents, or 0.4%, last month to $18.30 an hour. The average workweek declined by 0.1 of an hour to 33.5 hours a week, as more full-time workers moved to part-time hours.
The massive loss in jobs gives further incentive for both the current administration, President-elect Barack Obama’s incoming administration and the Federal Reserve to consider a further stimulus packages to help boost the economy.
Investors had fully priced in the chance the Federal Reserve would cut an additional 0.5% off at their December meeting.
President-Elect Obama said in a statement that “now is the time to respond with urgent resolve to put people back to work and get our economy moving again.”
White House spokeswoman Dana Perino said the administration was “very concerned” about the recent accelerating job losses.
Today’s jobs report was anticipated all week by Wall Street traders and investors. None of the figures that came out earlier this week have given economists any hope that the jobs report would come in better than what is already predicted.
The ADP report on Wednesday indicated that the private sector cut 250,000 jobs last month, while the Labor Department said more than 4 million people have been on unemployment benefits for more than one week.