[December 06, 2008]

Nation's job losses in November most in 34 years

(New Haven Register (New Haven, CT) Via Acquire Media NewsEdge) Dec. 6--Evidence continues to mount that the recession is battering the employment market, with the U.S. Labor Department reporting Friday that employers slashed 533,000 jobs in November -- the most in 34 years and far more than economists were expecting -- sending the unemployment rate to a 15-year high.

"This is stunning," said Donald Klepper-Smith, chief economist at DataCore Partners LLC in New Haven and an economic adviser to Gov. M. Jodi Rell. "It's probably going to get worse before it gets better."

Economists had been bracing for job losses of about 320,000, and many were surprised by the 533,000 total. It was the deepest cut in the work force since 602,000 jobs were lost in December 1974, when the U.S. was in a severe recession.

"It's bad. The recession is in full force," said Nicholas Perna, economic adviser to Waterbury-based Webster Financial Corp. "The implication for Connecticut is that we're getting dragged along with it. It's inevitable. So much of what we do is affected by the national and international economic conditions. This is serious stuff; this is bad news."

The unemployment rate rose to a 15-year high of 6.7 percent last month, up from 6.5 percent in October. It would have risen even higher if not for the exodus of 422,000 people from the work force. In November 2007, the unemployment rate was 4.7 percent.

The job loss numbers and unemployment rate are derived from two different surveys -- one of businesses and one of households, respectively.

There were 10.3 million people unemployed as of November, while the number of those employed was 144.3 million.

"It's an awful report," said Todd P. Martin of Fairfield-based Todd P. Martin Economic Services. "These are very disturbing numbers."

Connecticut-specific employment numbers for November are slated to be released by state labor officials later this month.

A panel of economic experts declared earlier this week that the nation has been in a recession since December 2007, and President George W. Bush publicly acknowledged the recession for the first time Friday.

According to the Labor Department, the economy has lost 1.9 million jobs over the past 11 months, while the number of unemployed people has risen by 2.7 million and the jobless rate increased 1.7 percentage points.

U.S. Rep. Rosa L. DeLauro, D-3, called Friday's report "staggering" and said it should spur Congress and the president to expedite and enact emergency recovery measures.

"While we talk of record numbers in the hundreds of thousands (of job losses), we cannot lose sight of the implications for individual families struggling to get by in this economy," she said in a prepared statement. "It is the difficulty they face in finding a job, paying the mortgage or rent, and buying groceries that should propel action."

U.S. Sen. Christopher J. Dodd, D-Conn., echoed those sentiments, saying lawmakers must prevent additional job losses and address the major causes of the financial meltdown, including the rising foreclosure rate. "We must then change our economic policy to put people back to work, such as investing in public infrastructure," he said in a written statement.

Area economists said the job losses are far from over. Martin said Connecticut stands to be particularly hard hit from forthcoming Wall Street layoffs that will affect many who live in Fairfield County. Job cuts on Wall Street have already begun, but Martin said they likely will accelerate before the end of year, with financial firms aiming to cut jobs before having to pay those workers traditionally hefty year-end bonuses.

More people out of work means fewer consumers are spending money in the economy, Klepper-Smith said.

"With three weeks to go until Christmas, this is not the news that retailers want to see," he said, although there is a silver lining for holiday shoppers. "Retailers are going to have to do everything they can and pull out all the stops to get shoppers through the doors."

While the report was disappointing, Perna said it is important to keep it in perspective.

"It's important not to panic," he said. "This is not end-of-the-world bad news. This recession is going to look a lot like the ones in the mid-1970s or the early 1980s, which were two of the more severe recessions since World War II," he said, noting the most recent recession in 2001 was relatively "short and shallow."

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