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Archive for Saturday, January 10, 2009

Job losses hit 2.6 million nationwide in 2008

January 10, 2009

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— A staggering 2.6 million jobs disappeared in 2008, the most since World War II, and the pain is only getting worse with 11 million Americans out of work and searching.

Unemployment hit a 16-year high of 7.2 percent in December and could be headed for 10 percent or even higher by year’s end.

Friday’s government figures were “a stark reminder,” said President-elect Barack Obama, that bold and immediate government action is needed to revive a national economy that’s deep in recession and still sinking.

More than a half million jobs melted away as winter took hold in December — 524,000 in all, the government estimated — and the true carnage will almost certainly turn out to be even worse when the figures are nailed down more clearly a month from now.

“Behind the statistics that we see flashing on the screens are real lives, real suffering, real fears,” said Obama, already moving full-speed with Congress to put together an emergency revival plan a week and a half before taking office.

It’s real, indeed, for 38-year-old Rachel Davis of St. Louis. “If you get laid off right now, God help your soul,” she said. “You better hope you’ve got savings or someone backing you.”

In fact, she was laid off three months ago after working as a dental technician for 20 years.

While Congress and the new president struggle to find answers, she says, “I have no faith in this system” and plans to move out of the country in hopes of finding better luck.

The severe 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 makes the downturn especially dangerous.

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

Investors, too. The Dow Jones industrial average fell 143 points Friday to end the week down nearly 5 percent, the worst week since November.

The Labor Department’s unemployment report showed widespread damage across U.S. industries and workers — hitting blue-collar and white-collar workers, people without high school diplomas and those with college degrees.

“One word comes to mind — dreadful,” said Stuart Hoffman, chief economist at PNC Financial Services Group.

And, there’s no relief in sight. The new year got off to a rough start with a flurry of big corporate layoffs, and there were more on Friday. Airplane maker Boeing Co. said it plans to cut about 4,500 jobs this year, and uniform maker G&K Services Inc. is eliminating 460 jobs. Employers also are cutting workers’ hours and forcing some to go part-time.

The average work week in December fell to 33.3 hours, the lowest in records dating to 1964 — and a sign of more job reductions in the months ahead since businesses tend to cut hours before eliminating positions entirely.

Economists predict a net total of 1.5 million to 2 million or more jobs will vanish in 2009, and the unemployment rate could hit 9 or 10 percent, underscoring the challenges Obama will face and the tough road ahead for job seekers.

Obama, who takes over Jan. 20, is promoting a huge package of tax cuts and government spending that could total nearly $800 trillion over two years. With add-ons by lawmakers, the package could swell to $850 billion or higher.

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