How on earth can analyst claim a bottom when this landslide is picking up speed? Don't be fooled by the inconsequencial re-bound the stock market claimed today. The stock maket is Schizophrenic! We were given really bad news today and the market celebrated? The DJIA closed up 259 pts. That's not normal.
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Reuters.com
By Alister Bull
Fri Dec 5, 2008 3:26pm EST
WASHINGTON (Reuters) - U.S. employers axed 533,000 jobs from payrolls in November, the most in 34 years, as the year-old recession hammered the economy and hardened calls for dramatic government action to restore growth.
The Labor Department said on Friday the unemployment rate hit 6.7 percent last month, the highest since 1993, which adds up to 10.3 million Americans out of work, 2 million more than the population of New York City.
The jobless rate, which stood at 6.5 percent in October, would have been even higher but for people leaving the labor force in discouragement over their search for work.
A number of U.S. companies have announced jobs cuts this week, including General Motors Corp and asset manager Legg Mason Inc on Friday, a day after phone giant AT&T said it was letting 12,000 workers go. Economists expect the unemployment rate to top 8 percent by late next year.
"You can't get much uglier than this. The economy has just collapsed, and has gone into a free fall," said Richard Yamarone, chief economist at Argus Research in New York.
The collapse of the U.S. housing market last year sparked a global credit crisis that has killed growth, panicked investors and destroyed some of the oldest names in banking.
The U.S. government has pledged $700 billion of taxpayer money to shore up the financial sector and President-elect Barack Obama has vowed a powerful fiscal stimulus, with more aggressive action from the Federal Reserve also expected.
Obama, who takes office on January 20, said the downturn demanded action to create new jobs, which economists say means a spending and tax plan of $500 billion to $700 billion.
"There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better," Obama warned.
U.S. mortgage foreclosure levels hit a record in the third quarter, said the Mortgage Bankers Association, which estimates that 2.2 million home mortgages will start the foreclosure process this year before government efforts to stem the tide can gain traction.
Job losses in November were the steepest since December 1974, when 602,000 jobs were shed, and much worse than the consensus on Wall Street for a 340,000 reduction.
In addition, job losses in recent months turned out to be worse than previously reported. October's loss was revised to 320,000, originally given as a 240,000 loss, while September's drop was revised to 403,000 from 284,000.
Employment in manufacturing dropped by 85,000, while construction payrolls shrank by 82,000 jobs. Construction employment has declined for 17 straight months, and factory jobs have declined 29 straight months.
"It's just a disaster," said Stephen Stanley, chief U.S. economist at RBS Greenwich in Greenwich, Conn.
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