WASHINGTON — An alarming half-million American jobs vanished virtually in a flash last month, the worst mass layoffs in more than a third of a century, as economic carnage spread ever faster and the nation hurtled toward what could be the hardest times since the Great Depression.
Underscoring Friday’s dismaying signs of a rapidly deteriorating economy, General Motors announced yet more job cuts and a record number of homeowners were reported behind on mortgage payments or in foreclosure.
Somehow Wall Street found a silver lining, betting that so much bad news would force fresh government action to revive the foundering economy. The Dow Jones industrial rose 259 points.
Staring at 533,000 lost jobs, economists were anything but hopeful. Since the start of the recession last December, the economy has shed 1.9 million jobs, and the number of unemployed people has increased by 2.7 million — to 10.3 million now out of work.
Some analysts predict 3 million more jobs will be lost between now and the spring of 2010 — and that the once-humming U.S. economy could stagger backward at a shocking 6 percent rate for the current three-month quarter.
“The economy is in a free fall,” said Richard Yamarone of Argus Research. “It is as if someone flicked off the switch on hiring.”
“It’s a mess,” said Mark Zandi, chief economist at Moody’s Economy.com. “Businesses, battening down the hatches, are concerned about their survival and are cutting workers.”
President-elect Barack Obama said the crisis “is likely to get worse before it gets better,” and no one was going to argue that point. Economists predicted the unemployment rate, which rose to a 15-year high of 6.7 percent in November, could soar as high as 10 percent before skittish employers begin hiring again.
The jobless rate would have bolted to 7 percent for the month if not for the exodus of 422,000 people from the work force for any number of reasons — going back to school, retiring or simply abandoning job searches out of sheer frustration. When people stop looking, they’re no longer counted in the unemployment rate.
The rate was at 4.7 percent just one year ago, and was at 6.5 percent in October.
Employment shrank in virtually every part of the economy — factories, construction companies, financial firms, accounting and bookkeeping, architectural and engineering firms, hotels and motels, food services, retailers, temporary help, transportation, publishing, janitorial and building maintenance, and even waste management. The few fields spared included education, health care and government.
The United States — already in recession for a year, may not be out of it until the spring of 2010 — making for the longest downturn since the Great Depression of the 1930s, economists are now saying. Recessions in the mid-1970s and early 1980s last 16 months.
Unemployment peaked at 10.8 percent in 1982 — terrible, but still a far cry from the Depression, when roughly 1 in 4 Americans were out of work.
That said, more pain is certainly in store. Fresh evidence: A record 1 in 10 homeowners with a mortgage was either at least a month behind on payments or in foreclosure at the end of September, the Mortgage Bankers Association reported.
President Bush, who used the word “recession” for the first time to describe the economy’s state, pledged Friday to explore more efforts to ease housing, credit and financial stresses.
“There is still more work to do,” Bush said. “My administration is committed to ensuring that our economy succeeds.”
President-elect Obama said the dismal job news underscored the need for forceful action, even as he warned that the pain could not be quickly relieved.
“There are no quick or easy fixes to this crisis … and it’s likely to get worse before it gets better,” Obama said. “At the same time, this … provides us with an opportunity to transform our economy to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early down payment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come.”
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