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U.S. Job Losses Signal Recession Will Be Long, Deep (Bloomberg.com)
EXCERPT:
By Rich Miller and Bob Willis
Dec. 6 (Bloomberg) -- The U.S. economy may be headed for its deepest and longest recession since World War II as mounting job losses take their toll on consumer confidence and spending.
Employers cut payrolls last month at the fastest pace in 34 years as the unemployment rate rose to 6.7 percent, the highest level since 1993. The 533,000 drop brought cumulative job losses this year to 1.91 million, the Labor Department said yesterday in Washington.
“Almost all businesses are in survival mode, and they’re slashing payrolls and investments just to conserve cash,†Mark Zandi, chief economist at Moody’s Economy.com in West Chester, Pennsylvania, said in a Bloomberg Television interview yesterday. “We’re in store for some big job losses.â€
The plunge may spur incoming President Barack Obama to come up with a fiscal stimulus package larger than the $700 billion plan some economists advocate. Obama today promised to make the “single largest new investment†in roads and public buildings as part of his plan to save or create 2.5 million jobs.
Yesterday’s figures added urgency to negotiations over aid to U.S. automakers. Democrats in Congress reached an agreement in principle with the Bush administration on providing funds to prevent a collapse of General Motors Corp. and Chrysler LLC, a congressional aide said.
U.S. stocks fell for the fourth time in five weeks as the worsening job market added to concern the recession is deepening. The Standard & Poor’s 500 Index lost 2.3 percent to 876.07, trimming its rebound from the 11-year low reached on Nov. 20 to 16 percent.
Fourth-Quarter GDP
John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, said the jobs report suggests that the economy shrank at annual rate of 5 percent in the final three months of the year. That would be the biggest contraction since the first quarter of 1982.
“Consumer confidence is going to be bad,†Silvia said. “It is going to be a difficult winter for a lot of people.â€
Yelena Grinberg of San Francisco is already feeling the effects of a sluggish labor market. The 26 year old has sent out more than 100 resumes since she lost her job as an administrative assistant, and has only landed one position: doing clerical work for $12 an hour over two days.
“It’s really tough,†she said, standing outside an Employment Development Department office in San Francisco. “I was so sure it wasn’t going to be hard. But no one wants to look at me,†she said, starting to cry. “I’m running out of money and I’m freaking out.â€
FULL STORY: https://www.bloomberg.com/apps/news?pid=20601087&sid=aniNd2kN.vdI&refer=worldwide
Both my sons have had to take pay cuts.The only thing positive is they don't have to pay as much for gas.My oldest son drives 140 miles round trip everyday to work.The younger one and his wife drive big trucks.One truck was given to them but I tried to warn them when they bought the second truck.Christmas wasn't going to happen for my 3 year old granddaughter until I stepped in to be Santa this year.She is the one that got molested and there was NO WAY she was going to have a tree with no presents under it this year.The jury trial starts January 3rd and I hope they lock the monster up.Little ones shouldn't have to go through what she went through and I want her to think Santa knows she was an 'extra special' little girl this year.I was very impressed with Barack Obama on "Meet the Press" this morning.I felt proud that I voted for him.I am all over the place with this comment but my mind has so many thoughts spinning around in it.
