U.S. Congress Joint Economic Committee; Chairman, Sen. Charles Schumer; Vice Chair, Rep. Carolyn Maloney

WEEKLY ECONOMIC DIGEST: Nearly 2 Million Jobs Lost as Recession Marks First Full Year

December 9, 2008

ECONOMIC NEWS

Over Half a Million Jobs Lost in November.  The November Employment Report from the Bureau of Labor Statistics (BLS) showed that the number of job losses increased dramatically during the month, with employers cutting 533,000 jobs from their payrolls.  November marked the 11th straight month of job losses and the single worst month for payrolls since 1974.  Though we’ve witnessed a deteriorating job market for nearly a year now, the pace of job losses has picked up considerably amid dwindling retail sales, limited access to credit, and an all-around pessimistic consumer outlook.  With revisions to previous releases over the last 11 months, the U.S. has lost a total of 1.9 million jobs.  The impact to the manufacturing sector has been unprecedented; over 600,000 jobs have been lost since December 2007 and sector-wide payrolls are now at levels not seen since 1950. (See Chart) There were another 91,000 jobs lost in the retail sector in November, showing that the fallout has not only spread to the service sector but has also been particularly devastating for an industry that usually thrives during the holiday season.  There are almost half a million fewer jobs in the retail sector now compared to November 2007.

Unemployment Rate Increases to 6.7 Percent.  The BLS also reported that the unemployment rate reached 6.7 percent in November, up 0.2 percentage points from October and now higher than at any point since 1993. The official number of unemployed – now at 10.3 million – actually understates the weakness of the job market, as the official tally of “unemployed” includes only those who are actively looking for (and would accept) a job.  There are an additional 1.9 million marginally attached workers, those who have searched for work during the past 12 months and are available to work now but who are not considered part of the labor force because they are not currently job searching.  There are another 7.2 million working part-time for economic reasons, either due to a forced cutback in hours worked or because it was the only job available.  Using the broadest BLS measure of unemployment, which includes these part-time and marginally attached workers, the under-employment rate rises to 12.5 percent (19.5 million persons), the highest level since the BLS began compiling this statistic in 1994.  This more comprehensive under-employment rate indicates that 1 out of every 8 available workers cannot find a full-time job.

NBER: Recession Began Last December.  The Business Cycle Dating Committee of the National Bureau of Economic Research announced that the U.S. economy officially entered into a recession in December 2007.  The dating committee, which looks for evidence of a widespread, significant decline in economic activity lasting more than a few months, concluded that last December marked the peak of the business cycle due to overall declines in inflation-adjusted disposable income, manufacturing, wholesale and retail sales, industrial production, and employment. The dating of the recession also shows that it’s currently the longest recession since 1981-1982, which lasted 17 months and saw the unemployment rate reach 10.8 percent.

THE WEEK AHEAD

DAY RELEASE
Tuesday, Dec 9 Pending Home Sales (October 2008)
Thursday, Dec 11 Import and Export Price Indices (November 2008)
U.S. International Trade in Goods and Services (October 2008)
Friday, Dec 12 Retail Sales (November 2008)
Producer Price Indices (November 2008)
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