MW: Job market got uglier in November, economists say
Expect 350,000 few jobs, and a rise in the jobless rate to 6.8%
WASHINGTON (MarketWatch) - Nearly a year into a recession, the U.S. labor market suddenly got much uglier in November, economists say.
Analysts are bracing for what could be the worst month for job losses in more than 30 years when the Labor Department reports on the November employment figures at 8:30 a.m. on Friday.
Economists surveyed by MarketWatch expect a decline of 350,000 jobs, which would be the largest loss since 431,000 jobs were lost in May 1980. Very few people would be shocked at a loss of 400,000 jobs. See Economic Calendar.
So far in 2008, job losses have averaged 118,000 per month, but the pace has picked up to 217,000 over the past three months.
The unemployment rate is expected to jump from 6.5% to 6.8% in November, which would be the highest in 15 years.
And the worst news is that the news is expected to get worse in coming months.
"It is blindingly obvious that the U.S. labor market is in a terrible state and is deteriorating rapidly," wrote Ian Shepherdson, chief domestic economist for High Frequency Economics. He expects the job losses "to accelerate over the next few months, peaking - hopefully - in the early spring."
The rate of decline may taper off in the spring, but the losses will probably continue throughout the year. "The eventual peak [in unemployment] will be close to 9%," Shepherdson said.
Almost nothing went right on the labor front in November, according to the preliminary data already known.
Initial jobless claims spiked to more than 525,000 a week, and continuing claims have hit their highest levels in 16 years.
Big businesses cut workers by the thousands. According to the Challenger Gray & Christmas survey, corporate layoff announcements rose to a seven-year high. Small businesses were also shedding workers, according to the ADP employment index.
Heavy job losses continued in the manufacturing and construction industries, while only 5% of nonmanufacturing firms were hiring in November, the Institute for Supply Management reported.
Consumers feel the pinch, with more than 37% telling the Conference Board canvassers that jobs are hard to find, compared with 9% who say jobs are plentiful.
