US sheds over half million jobs in November

US sheds over half million jobs in November

WASHINGTON

Saturday, December 6, 2008

THE US economy lost a stunning 533,000 jobs in November, sending the unemployment rate to a 15-year high of 6.7 per cent, the Labor Department reported yesterday.

The monthly report on nonfarm payrolls, seen as one of the best indicators of economic momentum, highlighted the severe retrenchment by companies in the face of a struggling economy and tight credit.

The number of job losses was much higher than the 325,000 expected by private forecasters.

"This is almost indescribably terrible," said Ian Shepherdson, chief US economist at High Frequency Economics.

"In the past six months the US has lost 1.55 million jobs, almost as many as were lost in the whole 2001 recession, which included 9/11 and the two months after. The pace of job losses is accelerating alarmingly."

The Labor Department also made a sharp upward revision in the number of job losses in the prior two months: October saw a loss of 403,000 jobs (up from an earlier estimate of 240,00) and September job losses were revised up to 320,000 from 284,000.

"There is no sugar-coating this data," analysts at Briefing.com said. "It is bad news that will weigh heavily on consumer sentiment and will serve to increase concerns about the depth and length of the current slowdown."

Sophia Koropeckyj at Economy.com said that losses "were broad-based across both service-producing and goods-producing industries" and the worst single-month decline since 1974.

"The economy is in recession, and the severity will far surpass the depths of the last two recessions."

The jobless rate, based on a separate survey of households, was the highest since October 1993 but slightly better than the consensus estimate of economists of 6.8 per cent.

The Labor Department noted that since the official onset of recession in December 2007, some 2.7 million jobs have been lost, and the unemployment rate rose by 1.7 percentage points.AFP