Archive for Friday, January 9, 2009

National unemployment rises to highest level in 16 years

About 2.6 million jobs lost in 2008

January 9, 2009

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The nation's unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs. The labor market is expected to remain weak as mass layoffs continue.

The Labor Department's report, released Friday, underscored the terrible toll the deepening recession is having on workers and companies, and highlights the hard task President-elect Barack Obama faces in resuscitating the flat-lined economy.

For all of 2008, the economy lost a net total of 2.6 million jobs. That was the most since 1945, when nearly 2.8 million jobs were lost. Although the number of jobs in the U.S. has more than tripled since then, losses of this magnitude are still being painfully felt.

With employers throttling back hiring, the nation's jobless rate averaged 5.8 percent last year. That was up sharply from 4.6 percent in 2007 and was the highest since 2003.

Although economists were forecasting even more payroll reductions in December — around 550,000 — job losses in both October and November turned out to be deeper than previously estimated. Revised figures showed that the employers slashed 584,000 positions in November and another 423,000 in October.

The unemployment rate, meanwhile, rose from 6.8 percent in November, to 7.2 percent last month, the highest since January 1993. Economists were expecting the jobless rate to rise to 7 percent.

Job losses were widespread in December. Construction companies slashed 101,000, and factories axed a a whopping 149,000 jobs. Professional and business services got rid of 113,000 jobs. Retailers eliminated nearly 67,000 jobs, and leisure and hospitality reduced employment by 22,000. That more than swamped gains in education and health care, and the government.

Employers are chopping costs as they try to cope with dwindling appetite from customers in the U.S. as well as in other countries, which are struggling with their own economic problems.

Workers with jobs saw modest wage gains.

Average hourly earnings rose to $18.36 in December, up 0.3 percent from the previous month. Economists were expecting a 0.2 percent increase. Over the year, wages have increased 3.7 percent, although high prices for energy and food earlier this year made people feel like their paychecks weren't stretching that far.

The U.S. recession, which just entered its second year, is already the longest in a quarter-century, and is likely to stretch well into this year. The fact that the country is battling a housing collapse, a lockup in lending and the worst financial crisis since the 1930s make the current downturn especially dangerous.

G&K; Services Inc., which provides uniforms and facility services, on Friday said it is eliminating 460 jobs as it aims to trim costs amid weak demand. And late Thursday, Intermec Inc., which makes electronic devices for tracking inventory, said it plans to cut 150 jobs, or 7 percent of its work force.

Earlier this week, drugstore operator Walgreen Co., managed care provider Cigna Corp., aluminum producer Alcoa Inc., data-storage company EMC Corp. and computer products maker Logitech International all announced major layoffs to cope with the recession.

All the problems have forced consumers and companies alike to retrench, feeding into a vicious cycle that Washington policymakers are finding difficult to break.

Obama says a bold approach is needed to bust through this cycle and revive economy.

"I don't believe it's too late to change course, but it will be if we don't take dramatic action as soon as possible," he said Thursday.

"If nothing is done, this recession could linger," Obama warned. "The unemployment rate could reach double digits."

Obama, who takes over Jan. 20, is promoting a massive package of tax cuts and government spending that could total $775 billion over two years. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say.

Even with a new government stimulus and the Federal Reserve's decision to ratchet down a key interest rate to an all-time low, the unemployment rate is expected to keep rising. Some economists think it could hit 9 or 10 percent at the end of this year.

Comments

jaywalker 6 years, 5 months ago

Such a joke. The numbers are a hell of a lot higher than 2.6 million. Unemployment only accounts for those that file for benifits. Small biz owners, contractors, illegals.......they don't get to 'file'. 10 million out of work would not surprise me.

SMe 6 years, 5 months ago

and it's gonna get worse.Just keep on buying them foreign products folks.

gccs14r 6 years, 5 months ago

Never mind that we spent the last 8 years spending 7 dollars of Federal debt to create every new dollar of consumer spending. That formula for rocketing into the poorhouse is pure BushCo. Now Obama will work for four years, trying to sop up all this debt, and just when we might start to turn the corner and make some headway, the usual idiots will blame him for the problems we've been having and say it's time for a Republican again. That's how we got stuck with Ronnie, and how we went from $900 billion in debt in 1980 to $11 trillion today.

KSManimal 6 years, 5 months ago

Highest in 16 years?Hmmmm.....what do today, and 16 years ago today, have in common?Oh, yeah. A Bush in the White House.

jaywalker 6 years, 5 months ago

Got stuck with Ronnie, gcccccccc? Riiiiiiiight. Had nothin' to do with the disaster known as Carter, widely considered the worst Prez ever 'til W. came along?

Steve Jacob 6 years, 5 months ago

What's scary is we have a lot more people in the county the 16 years ago. And Obama gets up to a year before he gets the blame.

jayhawklawrence 6 years, 5 months ago

For decades US manufacturers have been complaining about unfair treatment by the government and getting no support from academics and economic "experts". The current scenario should wake up our policy makers about this problem. However, I don't believe the current crash will be enough to change negative attitudes toward US manufacturing.The big 3 are not the leaders of US manufacturing. The reality is that they rely on the thousands of sub contracted machinists who do the real work behind the scenes. They are really the ones who have provided much of the innovation and ability for us to compete. Most of these are machine shops have less than 10-20 employees. We need to clean up the problems in our international trade agreements to prevent unfair trade practices. We need to demand that our legislatures attend manufacturing conferences and become educated by manufacturers.The idea that China and India are going to be the manufacturing centers of the world and we are going to be a service oriented economy is about as dumb as dumb gets. Yet, as long as dumb people make the rules we will continue to slide in that direction.Our current situation was created by the same type of financial gurus (that caused the housing crisis and subsequent banking crisis) who have been shipping all of our intellectual assets, fixtures, tooling, prototypes, drawings and subsequently jobs overseas so they can show their shareholders a better quarterly bottom line. I have to give these guys credit for walking away with their pockets full of cash by liquidating decades of American ingenuity, innovation, talent and skill.

Strontius 6 years, 5 months ago

It would be nice if we could save the blame game until after the problem has been fixed. Until then, we're just wasting energy that could be put to better use.

appleaday 6 years, 5 months ago

I agree, Strontius. Why don't we all get out of the sandbox and quit trying to figure out who to blame and look instead for solutions? We're going to have to pull together to overcome these problems we're facing. It's important to see where mistakes have been made, of course, to avoid repeating them, but there are plenty of mistakes and plenty of good things on both sides.

Godot 6 years, 5 months ago

Now Obama admits he knows nothing about economics, but that he will rely upon the guidance of a team of experts. Sadly, the experts are the same group of conmen and crooks who were complicit in creating this mess. Putting them in charge of this so-called rescue is unthinkable. They should be in jail, not in power. But, what can you expect from a man who, when put under a cloud of suspicion (Blagoyevich), says, "I have investigated myself and found myself to have done nothing wrong."

gccs14r 6 years, 5 months ago

Carter got stuck with the results of the disastrous fiscal policies of Nixon and Ford. Now Obama is getting stuck with the disastrous fiscal policies of Bush.

BigAl 6 years, 5 months ago

"But, what can you expect from a man who, when put under a cloud of suspicion (Blagoyevich), says, “I have investigated myself and found myself to have done nothing wrong.”The only people putting Obama under a cloud of suspicion is the corrupt far-right media and lock-step followers.Give Obama a chance. GWB is handing over a terrible mess. This country is in much worse condition than it was 8 years ago.

Godot 6 years, 5 months ago

Who are the holdover crooks-cum-advisors?Geithner, Summers, Jamie Dimon, Barnie Frank, Chris Dodd, Charles Schumer, to name a few.Obama took care to avoid anyone associated with the Bush intelligence team in his choice for CIA head - he should do the same with his economic advisors.

Godot 6 years, 5 months ago

$1.2 trillion to create (or save) 3 million jobs. It will cost us $400,000 for each job.

Godot 6 years, 5 months ago

Oh, ho, ho, ho! Now we know what the 600,000 federal jobs will be. Per Colin Powell, national service - a draft.Told ya so.

cfdxprt 6 years, 5 months ago

jaywalker - U6 in the Fed's unemployment report, which includes unemployed, marginally employed (want full time, but can only get part), people who have had their unemployment expire, etc... is 13.5% which when taken times 130 million available workers puts it at about 17.5 million unemployed or under-employed workers. The way unemployment is calculated now is a scam anyways, they changed the methodology in the 90's to make it seem lower. U6 is the best metric there is, and even that tends to shoot low. Expect to see that number rise significantly in 2009.

jaywalker 6 years, 5 months ago

Thanks for the info, cfd. Not surprised at all as I've watched 100's of companies in my industry (construction) fold, consolidate, down-size, etc. If I hadn't seen this all coming and diversified we'd have gone the way of the dodo as well. Even so, I've basically taken the $1 salary route for the last 6 months so I wasn't forced to cut any of my men. They have familiies, I don't. There are perks for me; I don't work the road unless someone's on vacation, have gotten in great shape, caught up on my reading, and have made great strides on some writing. Even been able to pick up new clients with the extra time to work the phones and meet face to face. But virtually every friend I had in the market down here has lost everything. And I mean everything. Spouses, houses, toys, savings. The trickle down effect from the losses in construction hasn't completely spread outward either. The worst is still on the horizon.

madameX 6 years, 5 months ago

Larry:Where are you getting the "50% of Americans don't pay taxes" stat? It's not the first time I've seen it thrown around, but no one I've asked who actually believes it seems to be able to cite a source, including the right-wing professional journalist/columnist types I've emailed.

cthulhu_4_president 6 years, 5 months ago

Tom: Terrorism experts nearly unanimously are saying now we will be hit again. And this time may not be 3000, but 30,000 some say.===========================================Sources please? How do you know agreement is nearly unanimous among experts? You would only know that if you knew them all, and their opinions, not to mention the classified data they used to arrive at their opinions. Not sure how LJW world articles qualify in that regard.+++++++++++++++++++++++++++++++++++++++++Tom: And this time may not be 3000, but 30,000 some say.=========================================This is ridiculous and there is no way to know it with any degree of certainty. I can play your game too, Tom, check it out, ahem: "It's nearly unanimously agreed that every statistic Tom provides without a source is bull." It must be true because I typed it, right?

KSManimal 6 years, 5 months ago

....and why is it that when Bush gives "stimulus" checks to everyone - even to those who pay nothing - it's deemed "wonderful" by the right wing; yet when Obama proposes essentially the same thing, it's "socialism"?I've asked that of many right-wing folks, and none have even attempted to answer.

madameX 6 years, 5 months ago

Yeah, but where's the stat from? A specific number like 50% does not just appear out of thin air.

kmat 6 years, 5 months ago

Well Larry, in an age when the top 10% own 70% of the wealth, unemplymnent is skyrocketing and we are possibly heading towards another depression, what the hell do you think should happen? Let the top 10% enjoy life while the rest suffer? If that's your belief, then I really want to know if you call yourself a Christian.What the hell is wrong with people? Why is it so terrible to guarantee that everyone is taken care of? There is so little compassion left in this world and it is absolutely sickening. Everything is GREED. Are you idiots ever going to learn that greed is bad???

jaywalker 6 years, 5 months ago

"Why is it so terrible to guarantee that everyone is taken care of?"'Cuz that's not the role of government, nor should it be. There are NO guarantees in life, period, yet you think someone's 'un-Christian' because they believe those that have wealth should own the right to keep it? So, basically, noone needs to work for the American dream if they don't want to because Daddy will come along and take the money from the big, bad achievers and give it to the slackers? Swell. There are no guarantees, life is a crap shoot, accidents happen, rain falls on everyone at some point and time. The government is not there to kiss it and make it better, big corp bailouts notwithstanding. Economy is hurtin' and jobs are scarce. Suck it up and do what you gotta do.

KSManimal 6 years, 5 months ago

Larry,I'm well aware of my 1040, and the difference between withholdings and taxes actually paid. AND....you didn't answer my question.....As for your stats on government spending vs. taxes paid for different folks....I assume that's referring only to direct government programs, I bet that doesn't include things like highways - which those with more $ use more. You buy more stuff, you use more roads to haul that stuff to the store for you to buy......etc., etc.,....Those kinds of stats are meaningless without some context and/or explanation.

BigAl 6 years, 5 months ago

The fact is that Clinton handed Bush a balanced budget, low unemployment and a peaceful nation. Bush will now hand Obama a nation that has high unemployment, we have 2 wars going, we are hated all over the world, our economy is in the tank and we are running record deficits.The corrupt far-right wing media and their lock step followers somehow refuse to recognize this. It just amazes me how far some people can be duped.

madameX 6 years, 5 months ago

Even if the bottom 50% paid less under Bush than Clinton they (or I should say we, cause I'm pretty sure I"m in that club) still paid something. Even if they got more out than they put in they still put something in. That doesn't mean they "don't pay taxes." And given that the cutoff for the bottom 50% is 31k, according to your source, I'm guessing that at least some of the government spending referred to can be accounted for by general stuff like highways, which benefit everyone and are not targeted at any one income group, not welfare checks and food stamps like you seem to want to imply.

AjiDeGallina 6 years, 5 months ago

Hmm,Record inflation, possible depressionlowest approval ratings of any president everHighest unemployment ever, if you count those who exhausted their jobless benefitsproven false intellegence that sent our men and women to warrecord deficitFailing sustaining industry (farming, banking, manufacturing)But that is nothing, Clinton lied about the BJ.......ROFLMFAOThat die-hard 20% will not be swayed by any facts whatsoever, it is their man or nothing. Just for the record, I agree Clinton Lied and he was impeached for it. It is over and while I do NOT call it a non-issue, in comparison..there is no comparison.Mr. Obama is taking over the worst mess ever in the history of our country and the BUSH administration is clearly to blame.I do not have confidence and optimism most do in Obama, the mess is to large, I predict the USA will take decades to recover, if ever. I did not see a candidate running that could fix this mess in 4 or 8 years, come to mind, I doubt there is a candidate that could..Bush has failed us so extremely that full recovery might never be possible, at least not for a decade or more.And yet the 20% die-hards still rever him.Aint life grand.

Godot 6 years, 5 months ago

BigAl, Clinton balanced the budget by borrowing the assets of social security and medicare. Be honest, please.

Godot 6 years, 5 months ago

KsManimal, the "stimulus" checks that were sent out last year were strenuously, and loudly, opposed by myself and my conservative friends. I took that money and put it in the bank and did not spend it. Why? Because I knew that someway, somehow, our great and generous government would demand that I give it back. You don't get something for nothing.

Godot 6 years, 5 months ago

larry_the_moocher wrote: "Here is some information on the tax burden. This report says 60% recieve more in benefits than they pay in taxes."Then we are past the point of no return where those who pay no taxes have more representation than those who pay taxes. Those who take have more votes than those who make.

gccs14r 6 years, 5 months ago

"Reagan turned things around in five years."That's laughable. He took a bad situation and made it worse. His fiscal decisions haunt us to this day.

Chris Ogle 6 years, 5 months ago

Looking at our national debt exceeding 60% of GNP, it makes me wonder if we can recover from this one. Somebody please help us, we are in debt up to our eyeballs.

pissedinlawrence 6 years, 5 months ago

Its horrible! my husband has been out of work for 3 months and can't find work anywhere.

Lee Eldridge 6 years, 5 months ago

Just a couple points of correction and explanation.In 1993, Clinton was president. Not the first Bush.When people talk about 50% of our people don't pay taxes, this is a misstatement. 40% of our population (adult workers) do not pay federal income taxes. And the bottom 50% pay less than 3% of federal income taxes (last number I saw was 2.9%). A portion of these people (not sure of recent stats) actually get a refund on part or all of the payroll taxes they pay into the system. So even "social security" has become a welfare system.Obviously we all pay taxes at some level through sales taxes, property taxes, etc. But these are mostly state taxes. On a federal level, we already have a very progressive system where the few pay for the many. Bush took more Americans OFF the federal tax system (removing taxes for low income earners) than any president ever.And with Bush's stimulus checks, they went to people who paid federal income taxes. They did not go to everybody. Obama's plan has called for "refunds" and "tax cuts" to those who don't pay federal income taxes. I remain unclear how you can refund something to somebody who doesn't pay it in the first place. And I've yet to read a rational argument for how "refunding" money to somebody who doesn't pay federal income taxes effectively "stimulates" the economy. You stimulate the economy by putting small businesses in position to expand and employ.

jonas_opines 6 years, 5 months ago

Leegohawks: Just a slight correction, but January 1993, Bush was the president, not Clinton. Much like Obama, Clinton would not yet have taken power.Not that this means much of anything.

Godot 6 years, 5 months ago

The only answer is to flush out all the debt into the open, write it off, let the companies managed by the stupid/incompetent/criminal people, cease to exist.We cannot survive if we take from the current and future taxpayers to support failing businesses. If we do, our entire country will have the same outlook of our public schools. Such is the result of rewarding failure and punishing success.

Lee Eldridge 6 years, 5 months ago

Hey Jonas. Thanks for the correction of my correction :)

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