Jobless Rate Rises To 6.7 Percent

The full weight of the recession has come bearing down on the labor market. Employers shed more than half a million jobs in November. The unemployment rate is now 6.7 percent and economists expect it to go significantly higher. Layoffs are accelerating in just about every industry.

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MICHELE NORRIS, host:

This is All Things Considered from NPR News. I'm Michele Norris.

MELISSA BLOCK, host:

And I'm Melissa Block. More than half a million jobs - that's how many were slashed in November, making it the worst month in the job market in 34 years. Unemployment now stands at 6.7 percent. Economists say the numbers underestimate the trouble for workers, as NPR's Jim Zarroli reports.

JIM ZARROLI: Economists had predicted a weak employment report, and it proved to be even worse than anyone expected. Nearly every sector of the economy shed jobs, including manufacturing, construction, business services and retail. Sung Won Sohn is a professor of economics and finance at California State University.

Dr. SUNG WON SOHN (Economics and Finance, California State University-Channel Islands): These are really god-awful numbers. The economy's headed downhill, and really, the breaks are not working.

ZARROLI: Not only was the November payroll report weaker than expected; the government also raised its estimate of the number of jobs lost in September and October. The U.S. economy has now lost about 2.7 million jobs since the recession got under way a year ago. Ray Ross lost his job as a security guard in Nashville. His former employer has put him on call, but he's not getting much work.

Mr. RAY ROSS (Job Seeker, Nashville, Tennessee): Right now, I would take anything. I'm going down to - I'll go down to $7 - $6, $7 now just to have a job.

ZARROLI: Ross is still looking for work, but some of those who lose their jobs have given up the fight. The Labor Department said there are more than 600,000 discouraged workers. That's up from about 259,000 a year ago. There are also a lot of workers who are scraping by on part-time jobs, but would prefer to work full time. Edward Stewart Jr. has been subsisting on odd jobs in Kansas City, but he'd really like to find something better.

Mr. EDWARD STEWART JR. (Job Seeker, Kansas City, Missouri): Right now, I'm searching the Web and trying to make some phone calls to try to get some work for, like, a janitorial service maybe or, you know, whatever comes up.

ZARROLI: When workers like Stewart are taken into account, the labor market is actually a lot weaker than it appears, says California State University's Sung Won Sohn.

Dr. SOHN: When you add these part-timers and people who left the labor force, that is called the effective unemployment rate. In November, it was 12-and-a-half percent.

ZARROLI: The weak-jobs number comes during a week when the CEOs of the major U.S. auto companies are in Washington, pleading for financial assistance from Congress. Lawmakers have responded to the request coldly, but the report underscores how vital the auto industry is to the U.S. economy. One reason the retail sector suffered so much was an unusually steep drop in employment by auto dealers. The report will make it tougher for Congress to turn the automakers down. President Bush today said the jobs report reflects the fact that the economy is in a recession, and he pointed to the many steps taken by the Federal Reserve and the Treasury Department.

(Soundbite of press conference)

President GEORGE W. BUSH: It's going to take time for all the actions we've taken to have their full impact, but I am confident that the steps we're taking will help fix the problems in our economy.

ZARROLI: But the measures taken so far have been slow to work, and it's now certain that the new administration will inherit an economy that is much more troubled than anyone thought possible a year ago. The deterioration in the labor market only ratchets up the pressure on President-elect Obama to get some sort of economic stimulus plan approved as fast as possible. Jim Zarroli, NPR News, New York.

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November U.S. Job Losses Highest Since 1974

Edward Stewart Jr. looks for a job at an employment center in Kansas City, Mo. i

Edward Stewart Jr., 48, looks for a job at an employment center in Kansas City, Mo. Frank Morris for NPR hide caption

itoggle caption Frank Morris for NPR
Edward Stewart Jr. looks for a job at an employment center in Kansas City, Mo.

Edward Stewart Jr., 48, looks for a job at an employment center in Kansas City, Mo.

Frank Morris for NPR
Job seekers register at a job fair attended by thousands Nov. 13 in Hialeah, Fla. i

Job seekers register at a job fair attended by thousands Nov. 13 in Hialeah, Fla. Robert Sullivan/Getty Images hide caption

itoggle caption Robert Sullivan/Getty Images
Job seekers register at a job fair attended by thousands Nov. 13 in Hialeah, Fla.

Job seekers register at a job fair attended by thousands Nov. 13 in Hialeah, Fla.

Robert Sullivan/Getty Images

The U.S. economy shed jobs at a blistering pace in November, pushing the overall unemployment rate to 6.7 percent and putting new pressure on federal officials to approve another big stimulus package sometime soon.

Employers cut 533,000 jobs from their payrolls during the month, the worst decline since December 1974 and a much bigger drop than economists had predicted.

Companies also eliminated more jobs than first thought in September and October. That brings total job losses since the recession began in December 2007 to about 2.7 million, according to the Labor Department.

"Today's employment report reflects the difficulties in our economy. It is devastating when Americans lose their jobs, and many are worried about their future job security," said Commerce Secretary Carlos Gutierrez.

"These are really God-awful numbers. The economy's headed downhill and really the brakes are not working," said Sung Won Sohn, professor of economics and finance at California State University, Channel Islands.

Nearly every sector of the employment market lost jobs, including manufacturing (85,000), professional and business services (101,000), and leisure and hospitality (76,000). Unemployment rose for both adult women (5.5 percent) and adult men (6.5 percent).

"Right now I would take anything; I'd go down to $6 or $7 [an hour] just to have a job," says Ray Ross of Nashville, Tenn., who was recently laid off from his job as a security guard. His former employer has put him on call, but he isn't getting much work.

The retail sector lost 91,000 jobs, with auto dealers alone down by 24,000, underscoring the way Detroit's troubles are filtering through the broader economy. The drop comes in a week when officials of the big U.S. automakers are on Capitol Hill seeking financial assistance, and it is likely to make it harder for Congress to turn them down.

As high as it appears, the 6.7 percent unemployment rate actually underestimates the number of people hurt by the declining jobs market, because it doesn't include people who have given up searching for work or part-timers who would like to work full time, Sohn said. The report says more than 400,000 people left the labor market this year because they believe no jobs are available, he said.

Forty-eight-year-old Edward Stewart Jr., of Kansas City, Mo., has been subsisting on day jobs and occasional temporary gigs, but he would prefer to work a full week.

"Right now, I'm searching the Web and trying to make some phone calls and trying to get some work for like a janitorial service maybe, whatever comes up," he says.

In addition, the Labor Department estimates that about 600,000 workers have simply stopped looking for jobs, up from about 259,000 a year ago.

When these two groups are included, the effective unemployment rate is actually much higher than it appears, about 12.5 percent, Sohn says.

November's big drop puts new pressure on the incoming Obama administration and Congress to approve an economic stimulus package as quickly as possible. The president-elect has talked about a plan to create 2.5 million new jobs, at least in part by funneling money to the states to pay for large infrastructure projects.

"The jobs picture painted today is staggering, and it should be all the evidence Washington needs to act swiftly and decisively to shore up this economy," said Sen. Charles Schumer (D-NY).

Bush administration officials tried to sound a more optimistic note, saying the financial rescue package put into place by the Treasury Department would ultimately help the job market. U.S. officials have taken a number of steps to try to stabilize the financial system, such as buying stock in major banks and guaranteeing certain kinds of securities.

"it's going to take time for all the actions we've taken to have their full impact, but I am confident that the steps we're taking will help fix the problems in our economy and return it to strength," said President Bush, meeting with reporters at the White House today.

"My administration is committed to ensuring that our economy succeeds, and I know that the incoming administration shares the same commitment," he added.

The gloominess of the report sent stock prices down sharply early in the day, but they later rebounded. The Dow Jones industrial average rose by 259 points, finishing at 8635.

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