US unemployment up: 500K+, 34-year high

[Bounty]

US employers axed 533,000 jobs in November, the biggest monthly cut in 34 years, the US Labor Department said.

In a dramatic indication of the worsening situation in the economy, the US jobless rate rose to a 15-year high of 6.7% from 6.5% in October.

Since these latest figures were compiled, further jobs losses have been announced, including big cuts at AT&T.

The grim economic data pushed shares on Wall Street down by about 2.5% while oil went to a four-year low near $40.

Recent data has fuelled fears that the world's biggest economy is set for a deep, long downturn.

"This was much worse than was expected and represents wholesale capitulation. The threat of a widespread depression is now real and present," said Peter Morici, a professor at the University of Maryland School of Business.

The dollar fell against major currencies, and US light crude dived $1.31 to $42.31 a barrel after the November jobless figures were unveiled.

Reacting to the unemployment data, US President-elect Barack Obama said: "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better."

Recession year

The National Bureau of Economic Research said this week that the US entered a recession in December 2007.

Separately, a measure of US service sector activity, the Institute for Supply Management's index, dropped to a record low in November.

The US service sector makes up about 80% of US economic activity.

November was the 11th month in a row that the economy lost jobs.

"In the past six months the US has lost 1.55 million jobs, almost as many as were lost in the whole 2001 recession," said Ian Shepherdson at High Frequency Economics.

"You can't get much uglier than this. The economy has just collapsed, and has gone into a free fall," said Richard Yamarone at Argus Research in New York.

But some analysts say November job losses were expected to be very high.

"Markets have priced in the high job losses and unemployment rate in November," said Arpitha Bykere at RGE Monitor.

Bleak outlook

The economy contracted at an annual rate of 0.5% from July to September due to the biggest fall in US consumer spending in 28 years.

Many economists believe the gross domestic product will fall even more sharply in the current quarter.

On Wednesday, the Federal Reserve Board painted a bleak picture of the US economy in its influential Beige Book, a report used to help determine US interest rates.

It said economic activity has weakened across the US in the past two months, with retail sales, and vehicle sales in particular, "down significantly".

US companies such as AT&T, DuPont, JPMorgan Chase and mining company Freeport-McMoRan Copper & Gold have announced job cuts this month.

Analysts fear the trend will worsen further.

Not that I particularly enjoy being the bearer of bad news - far from it, in fact, I'm sick and tired of doomsayers - but I think this deserves some attention. Half a million extra unemployed in one month. That's... not very good.

[ray245]

Not to worry, the world as a whole has experienced tough times before, and we came off as fine in the end. The only difference is, there is a change in the world order.

Nothing to worry about really.

[KrauserKrauser]

It's only going to get worse. The hangovers are widning down, rational minds are going to start realizing that to survive, cuts are going to be needed.

One thing that is interesting is the idea of work projects ala New Deal. It is true that the national infrastructure could use some upgrading and there will be alot of people unemployed. If the money is spent on both job training and public works, the amount of additional debt these would generate might be more justifiable than simply handing out cash to the poor.

It would be nice if we could force some more marketable skills into the newwly unemployed as it would only increase the speed of recovery, but simply writing checks is easier and more immediately fulfilling.

[Broomstick]

I can't stop saying that the unemployment figures are only part of the picture - many, like me, are no longer counted "unemployed" because we are working but there is no question that I am underemployed. I'm working 10-20 hours per week, which is in no way adequate long term for me and mine. So even if the unemployed get work it will likely be fewer hours and less pay than before, which also contributes to the economic contraction.

[ray245]

Which reminds me, Obama's energy plan requires a lot of skilled workers. How are you going to find enough skilled workers if less people can afford a higher education, such as a engineering degree?

[TrailerParkJawa]

I can't stop saying that the unemployment figures are only part of the picture - many, like me, are no longer counted "unemployed" because we are working but there is no question that I am underemployed. I'm working 10-20 hours per week, which is in no way adequate long term for me and mine. So even if the unemployed get work it will likely be fewer hours and less pay than before, which also contributes to the economic contraction.

It also doesn't include people who stopped looking or ran out of benefits. Things are certainly going to get worse. Hope you find something thats 40 hours sooner than later.

[Broomstick]

Which reminds me, Obama's energy plan requires a lot of skilled workers. How are you going to find enough skilled workers if less people can afford a higher education, such as a engineering degree?

I guess someone is going to have to pony up the money for re-training.

You know, not every job requiring a skilled worker requires an engineering degree. In fact, churning out 1,000,000 new engineers wouldn't be a good idea. You need a variety of skill-sets, some more expensive or more difficult to obtain than others.

[The Spartan]

Which reminds me, Obama's energy plan requires a lot of skilled workers. How are you going to find enough skilled workers if less people can afford a higher education, such as a engineering degree?

I guess someone is going to have to pony up the money for re-training.

You know, not every job requiring a skilled worker requires an engineering degree. In fact, churning out 1,000,000 new engineers wouldn't be a good idea. You need a variety of skill-sets, some more expensive or more difficult to obtain than others.

Indeed. Welders, machinists and electricians spring immediately to mind and it takes time to teach and train someone to do those things and then certify them in the different sub-disciplines that they need to do a particular job correctly. Especially in something like, say, a nuclear power plant.

[irishmick79]

Still, with manufacturing, construction and service all getting drilled with losses, you're going to need a massive retraining program to maintain a viable pool of employees. It seems like all of the areas of the economy which don't require advanced training or degrees are getting hammered hard. How can you invest in retraining employees when you don't even know if the jobs are going to be there after they've been trained?

[Broomstick]

There is training and financial aid available - but it's geared to people who don't have any sort of degree already. So, because I have a bachelor's I'm fuck out of luck for getting help to be retrained in some other career. We need to change that - there are too many people with a degree who could become something else but can't because they're now out of work and don't have the cash to pay tuition themselves.

Hell, this week I'm learning to hang drywall - it's not that I'm unwilling, it's just that I don't fit the profile for whom those programs were set up. I'm "too educated" and frequently too old - nevermind I might well have a good 30 years of working life ahead of me.

[Broomstick]

Still, with manufacturing, construction and service all getting drilled with losses, you're going to need a massive retraining program to maintain a viable pool of employees. It seems like all of the areas of the economy which don't require advanced training or degrees are getting hammered hard. How can you invest in retraining employees when you don't even know if the jobs are going to be there after they've been trained?

Some jobs you will always need, or at least will need for next few decades. We need plumbers, electricians, road crews, auto mechanics, and so forth. Retraining just some of the unemployed to do these jobs will relieve some of the stress and get at least some people back to spending money on more than just housing and food - you know, they'll buy new clothes, eat out once in awhile, maybe by a DVD or video game... the stuff that helps keep the economy going. That will in turn help out the retail sector, which will slow down the loss of jobs there.

There is NOT just one solution to this. We need to get people back to work, we need to retrain people, we need to straighten out things like the banking crowd, and so on. It's a fucking mess and we'll need mops, brooms, and a lot of other cleaning supplies to get even a start on it.

[aerius]

I can't stop saying that the unemployment figures are only part of the picture - many, like me, are no longer counted "unemployed" because we are working but there is no question that I am underemployed. I'm working 10-20 hours per week, which is in no way adequate long term for me and mine. So even if the unemployed get work it will likely be fewer hours and less pay than before, which also contributes to the economic contraction.

Yup. Looking at the latest unemployment report the U-6 category which includes underemployed workers such as yourself is now up to 12.5%, and it looks to be zooming upward at a scary rate. At this rate we'll be looking at Depression level numbers within 6 months to a year.

Also of interest are the revisions to past months. October has been updated from -240,000 to -320,000 and September has gone from -284,000 to -403,000. I wouldn't be surprised if November gets revised to -750,000 or so when the next reports come out.

[ray245]

Still, with manufacturing, construction and service all getting drilled with losses, you're going to need a massive retraining program to maintain a viable pool of employees. It seems like all of the areas of the economy which don't require advanced training or degrees are getting hammered hard. How can you invest in retraining employees when you don't even know if the jobs are going to be there after they've been trained?

Some jobs you will always need, or at least will need for next few decades. We need plumbers, electricians, road crews, auto mechanics, and so forth. Retraining just some of the unemployed to do these jobs will relieve some of the stress and get at least some people back to spending money on more than just housing and food - you know, they'll buy new clothes, eat out once in awhile, maybe by a DVD or video game... the stuff that helps keep the economy going. That will in turn help out the retail sector, which will slow down the loss of jobs there.

There is NOT just one solution to this. We need to get people back to work, we need to retrain people, we need to straighten out things like the banking crowd, and so on. It's a fucking mess and we'll need mops, brooms, and a lot of other cleaning supplies to get even a start on it.

Well, at the least the US don't bother outsourcing those kind of stuff.

For us, well, if the service industry crash and burn, Singapore's screwed. To increase the amount of 'high-earning' people here, we decides to outsource construction crews, electricians, welders and technicians to overseas workers and thus allowing us to pay them with lesser amount. Which in turn, tried to focus Singaporeans on those higher paid jobs in the service industry.

Hmm, I guess this kind of policy makes us too vulnerable to a huge recession.


Anyway, simply allow more people to be retrained helps, if it improves the economic conditions of teachers, which in turn can boast the importance of education and help the economy to a certain extend.

[Broomstick]

Still, with manufacturing, construction and service all getting drilled with losses, you're going to need a massive retraining program to maintain a viable pool of employees. It seems like all of the areas of the economy which don't require advanced training or degrees are getting hammered hard. How can you invest in retraining employees when you don't even know if the jobs are going to be there after they've been trained?

Some jobs you will always need, or at least will need for next few decades. We need plumbers, electricians, road crews, auto mechanics, and so forth. Retraining just some of the unemployed to do these jobs will relieve some of the stress and get at least some people back to spending money on more than just housing and food - you know, they'll buy new clothes, eat out once in awhile, maybe by a DVD or video game... the stuff that helps keep the economy going. That will in turn help out the retail sector, which will slow down the loss of jobs there.

There is NOT just one solution to this. We need to get people back to work, we need to retrain people, we need to straighten out things like the banking crowd, and so on. It's a fucking mess and we'll need mops, brooms, and a lot of other cleaning supplies to get even a start on it.

Well, at the least the US don't bother outsourcing those kind of stuff.

For us, well, if the service industry crash and burn, Singapore's screwed. To increase the amount of 'high-earning' people here, we decides to outsource construction crews, electricians, welders and technicians to overseas workers and thus allowing us to pay them with lesser amount. Which in turn, tried to focus Singaporeans on those higher paid jobs in the service industry.

Well, it's FAR easier for Singapore to outsource the trades like plumbing, carpentry, electricians, etc. because you have a much smaller territory that needs to be supplied and far fewer actual numbers of those jobs needed. It's much harder to have guest workers or the like when, from even our nearest neighbors, getting to many parts of the country might require several days of travel, and those from further away will need to use airplanes to cross oceans. Also, we need far larger actual numbers of such tradesmen. If the US snatched up all the tradesmen we needed places like Singapore would find trouble filling their needs.

A similar situation arose with nursing - many western nations had nursing shortages and hired foreign nurses, which led to a shortage in other countries.

Of course, it's not impossible for the US to use foreign labor for this - illegal Mexicans (along with others such as Canadians, Poles, and various other Eastern Europeans) have made inroads into the trades, but some areas really do have a shortage. Thing is, even a smart person such as myself with good hand-eye skills takes time to learn what is necessary for these jobs.

Hmm, I guess this kind of policy makes us too vulnerable to a huge recession.

With the global economy everyone is vulnerable to one degree or another.

Anyway, simply allow more people to be retrained helps, if it improves the economic conditions of teachers, which in turn can boast the importance of education and help the economy to a certain extend.

Did I mention we have a chronic teacher shortage in the US? We do. We're short of teachers for a variety of reasons. As it happens, my sister managed to get into a program so she will probably be a certified teacher in a year or two, meanwhile she's trying to finish raising her two boys while she goes to school and tries to find better work. She told me she estimates her final earnings for the year will be $8,000 USD. Did I mention she, too, has a college degree, yet can't find high paying work?

Folks are starting to realize the situation is very, very bad, regardless of what politicians or the media keep saying otherwise. We should have started retraining people a year or two ago (if not earlier) but .... well, collectively the world has fucked up.

[Murazor]

Although I see that these are not good news for the fine people of the US of A, 177,000 Spaniards became unemployed this month.

Considering that Spain hasn't gone through a financial crisis in the scale of what we have seen the last few months in America, in addition to the fact that the United States have well over six times the population and about ten times the GDP of Spain, I'd say that you are doing more or less OK all things considered.

[Darth Wong]

Folks are starting to realize the situation is very, very bad, regardless of what politicians or the media keep saying otherwise. We should have started retraining people a year or two ago (if not earlier) but .... well, collectively the world has fucked up.

I've been saying for two decades that our increasing reliance on industries that don't actually make anything was a bad idea, but of course, until this summer that just made me a gearhead who didn't understand modern finance. Now all of a sudden I'm running into people everywhere who have apparently agreed with me all along, even if they always said the exact opposite.

It's a convenient way of shirking responsibility for being part of the problem: simply rewrite history.

[Murazor]

It's a convenient way of shirking responsibility for being part of the problem: simply rewrite history.

Although this borders in anecdotal evidence, denial seems to be more than a famous river as of late. And if you can't ignore the problem, spread the blame.

I have contact with a number of people who work teaching economic theory in the college level and reactions to the crisis range from "It is the government's fault, because the financial market is the most heavily regulated sector of the economy and this overregulation has caused the auto-regulatory forces of the free market to fail" to "No big deal, this is just a little scare caused by the media and by next summer all will be back to normal".

Considering that these are reasonably intelligent individuals, I'm aghast when I hear this kind of blind faith. That economy is a bit like religion I learned early on, but this kind of answer? Ridiculous doesn't even begin to cover it.

[Broomstick]

Although I see that these are not good news for the fine people of the US of A, 177,000 Spaniards became unemployed this month.

Considering that Spain hasn't gone through a financial crisis in the scale of what we have seen the last few months in America, in addition to the fact that the United States have well over six times the population and about ten times the GDP of Spain, I'd say that you are doing more or less OK all things considered.

The problem isn't just the month of November in isolation, or even the last six months - the problem is a trend of increasing joblessness. Our GDP last year might have been ten times that of Spain, this year it might not be so high. I'm not saying things aren't troublesome elsewhere, or that other people aren't worse off than I am - for example, I'm damn wealthy compared to a lot of people in Zimbabwe right now - the problem is that this isn't the end. Keep in mind, too, that normally unemployment goes down November and December in the US due to seasonal hiring, even in years that are not so wonderful.

The US is not OK. I sincerely hope it becomes OK again in the near future. I also hope the situation in Spain improves. Really, I hope everywhere improves because under my crusty exterior I'm really a softy who hates to see anyone suffer.

[aerius]

The US is not OK. I sincerely hope it becomes OK again in the near future. I also hope the situation in Spain improves. Really, I hope everywhere improves because under my crusty exterior I'm really a softy who hates to see anyone suffer.

You and me both. That's why I want these endless bailouts and market interventions to end, because all they're effectively doing is taking a cash advance on a credit card to pay off the monthly balance. Ok, great, the monthly balance is paid but the total debt just went up and the interest is compounding, so next month we're more fucked and it just keeps getting worse until the credit limit is reached and everything goes kaboom. I don't want to see my entire country and most of the world get fucked, though I wouldn't mind seeing the jackasses who got us into this mess get ass-pounded in prison.

[Murazor]

Not trying to belittle the suffering (and I think that suffering is just the right word to use here) of the American workforce, just trying to make a point about how screwed the world at large is right now.

And, if worse comes to worst, the older workers (people in the generation of my parents) that remember times with 25% unemployment and interest rates in the double digits, so I am reasonably sure that my own generation will be able to survive the experience for as long as the sanitary system doesn't collapse.

Still, my opinions about our first minister are quite negative and it is frustrating to see that so little is being done while our economy goes down the drain (not that there is a lot of space to maneuver with Spain being part of the eurozone and all that, but...) and reading the economical news in this forum and elsewhere doesn't help the mood much.

Sorry if I sounded bitchy in my previous post.

[Starglider]

Last week I rang a small company in Florida to order some parts for my car. The telesales guy was clearly in the actual warehouse in Florida and while we were waiting for the card payment to clear, I remarked that despite the pound dropping sharply against the dollar, it was still a lot cheaper to get the parts from the US than from Germany. Surprisingly this prompted a several minute diatribe on how the local economy was hurting badly and everyone around there was really worried about it. Not something I expected to hear down the phone from a random salesman.

[aerius]

Not too surprising actually, Florida's one of the states being hit especially hard by the recession since they had a huge housing bubble going. Plus their tourism industry is getting slaughtered since few people have the money to travel these days thanks to high gas prices and lack of easy credit. Lots of people used to max out their creditcards to pay for vacations then take out a HELOC on their homes to pay off the creditcard, they can't do that anymore.

[KrauserKrauser]

I know that easy credit may still be an issue but honestly if the prices around here are indicative of gas prices in the no one need claim that the gas prices are drastically high. I heard that they are predicting sub $1 a gallon within the next year, doesn't that debunk the OMG HIGH GAS PRICES reason?

[Broomstick]

High gas prices contributed to problems over the past year but it wasn't the sole cause. Prices are dropping because demand is dropping. It might even be the first signs of DEflation. As I have miniscule debt deflation might not hurt me too bad but those with debt... it will be even uglier than at present. IF it happens.

[Singular Intellect]

Hell, this week I'm learning to hang drywall - it's not that I'm unwilling, it's just that I don't fit the profile for whom those programs were set up. I'm "too educated" and frequently too old - nevermind I might well have a good 30 years of working life ahead of me.

How's that going Broomstick?

As a professional drywaller myself, I know it's far from the physically easiest job and it isn't mindless work either (at least if you want to do a good job).

Me personally, I'm currently working for a company that is utilizing/expanding my skills beyond just boarding; steel studs, fire taping and T-Bar installation. Certainly doesn't hurt to do that in this economic crisis.