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A third straight month of ugly job losses confirms the recession's gravity and underscores the problems the economy faces in 2009. More homes will be going into foreclosure as unemployment worsens with people spending less money as they prepare for tough times ahead.
Nonfarm businesses shed 524,000 jobs in December, the Labor Department said Jan. 9. November's losses were revised upward to 584,000 from an initial estimate of 533,000 while October's losses were raised to 423,000 from 320,000 previously.
That puts job losses for 2008 at 2.6 million, the highest number since 1945 and the first year of net job losses since 2002, when the economy saw 550,000 jobs disappear. At least 3 million jobs are expected to be lost in 2009.
December's unemployment rate rose to 7.2% from 6.8% the prior month. That's the highest rate since 7.3% in January 1993, when the jobless rate was beginning to decline after peaking at 7.8% in the 1990-91 recession.
We've got a ways to go before unemployment tops out in this recession. We expect a rate close to 9% by the end of 2009, a level not experienced since 1983, when the economy was still suffering the aftermath of the 1981-82 recession.
There is no relief in sight. Hard-hit retailers that hung on through the holiday shopping season will shed clerks and other workers. And mounting vacancies in shopping malls and office buildings are starting to take a toll in nonresidential construction whose trade group, the Associated General Contractors of America, just completed a survey that found that two-thirds of firms said they plan to cut payrolls this year.
The contractors say they're trying to postpone job cuts to see if the fiscal stimulus plan from President-elect Barack Obama delivers on its goal of $200 billion or so to be spent for bridges, roads and other infrastructure projects. Brian Burgett, president of Kokosing Construction in Fredericktown, Ohio, says, "Good talent is hard to find. In anticipation of a stimulus, we're still interviewing colleges to line up graduates in the spring." But it's getting harder to hold the line. Burgett says that the commercial side of his company saw the entire year's schedule of planned projects wiped out by a wave of cancellations in just three weeks.
Meanwhile, losses will continue in manufacturing jobs where the sharp decline in many international economies is causing a reduction in U.S. exports, which had been strong through much of 2008. Now, orders are dwindling, and jobs are too.
The only sectors showing gains are education, health care and government, but the increases totaling 52,000 jobs in December were swamped by other categories. Manufacturing fell 149,000 in December while construction lost 101,000 jobs and retail, 67,000.
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POSTED BY: Dr_design_cam (January 12, 2009 12:48 PM)
How can government be growing? With record deficits, and reduced income, how can we manage a burden of ADDITIONAL Non value added Government employees? Why should the public be burdened with additional cost, when we aren't getting help in the present case? Why don't we all become government employees??? or would that no longer be a democracy?
cam
POSTED BY: JD (January 12, 2009 05:18 PM)
It's astonishing that job losses were higher in 1945 than 2008. Really gives you some perspective. 1945 saw an economy growing out of a depression in a country with a population of 132 million. Today we are falling into recession with a population of 305 million. We don't know what real pain is, do we?
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