Jobless Rate At 16-Year High Of 7.2 Percent
ARI SHAPIRO, host:
We have a new jobs report to tell you about this morning, and the news is not good. The nation's unemployment rate last month shot up to 7.2 percent. The government and businesses cut 524,000 jobs in December. Joining us now is NPR's Yuki Noguchi to discuss this report. Morning, Yuki.
YUKI NOGUCHI: Morning.
SHAPIRO: OK, well, we already know that 2008 was a terrible economic year. Do these numbers show it was worse than we thought?
NOGUCHI: Well, yes and no. I mean, some had predicted much bigger job losses last month. However, what's more telling is that in October and November, which, as you know, were already terrible months, turned out to be worse than thought. Labor Department revises the year for those months and is now saying an additional 154,000 jobs were lost during that time. So, job loss really accelerated towards the end of the year, and now, the total jobs lost for all of last year? A whopping 2.6 million.
SHAPIRO: Wow. So, not only was December terrible, but October and November were worse than we thought. Well, when you break this down sector by sector, were there any bright spots at all?
NOGUCHI: Not many. Many of the jobs lost came from manufacturing and construction, as well as retail, which usually rises toward the end of the year, and the only sectors that didn't lose jobs were government, medical and education. Also, there's what economists call the invisible jobless, which are people who are discouraged and stop looking for work, or are part-time workers who can't find full-time jobs, and if you factor that in, some people say the actual number of people looking for jobs at the moment is closer to 13 or 14 percent. And you know, the unemployment numbers are really just talking about people who are looking for jobs.
SHAPIRO: Ah, I see.
NOGUCHI: And here's what John Silvia, who's chief economist with Wachovia Financial, told me this morning.
Dr. JOHN SILVIA (Managing Director and Chief Economist, Wachovia Corporation): The bright spot is the negative story, that the downdraft in jobs was so severe in the fourth quarter that we have seen the worst, in terms of the single biggest quarter for job losses and a decline in GDP.
NOGUCHI: So, basically, he's saying that while unemployment will continue to get worse, it won't be falling quite as quickly this year.
SHAPIRO: Hm. Well, put this in some historical context for us. How bad is it compared to previous years and decades?
NOGUCHI: Well, economists point to the early 1980s and post-World War II recessions as a kind of model for what's happening now. They say this isn't a regular recession, where businesses experience a kind of mild down cycle; it's a major structural change. And John Silvia says that a lot of that has to do with giving consumers more and more access to credit over the last four decades. So, let's take a listen.
Dr. SILVIA: And what we're finding out now is that perhaps, in many cases - in terms of access to credit cards, auto loans, auto leases, home mortgages, subprime lending - we may have pushed the envelope too far.
SHAPIRO: Well, what does this bode for 2009, looking ahead?
NOGUCHI: Well, most economists think that the unemployment rate will continue to rise, at least through the first half of this year and maybe into the second half, even. It might reach 8.5 or even nine percent. Of course, this will be a major issue for the incoming Obama administration to contend with, and they're talking about creating and retaining three million new or - jobs or - you know, different jobs by investing in infrastructure, schools and new energy. But even if their economic stimulus package passes really swiftly, the effect just won't be immediate.
SHAPIRO: Hm. That's NPR's Yuki Noguchi on news this morning that the unemployment rate has jumped to 7.2 percent. The economy lost more than 524,000 jobs in December. It was a dismal coda to a year in which 2.6 million jobs were lost. Thanks, Yuki.
NOGUCHI: Thank you, Ari.
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