With the economy in a recession and most indicators signaling even more difficult times ahead, economists say job losses will likely deepen and continue through at least the first half of 2009.
"The economy is now deteriorating with frightening speed and ferocity - it's truly horrific," said Bernard Baumohl, chief economist at the Economic Outlook Group. "We'll see significant declines going forward."
Baumohl expects December's job loss total to exceed November's 533,000 announced by the government Friday, but remain in the 550,000 to 600,000 range. He predicts the economy will have lost 3 million to 4 million jobs for the two years ending Dec. 31, 2009.
In 2008, the economy has lost more than 1.9 million jobs, two thirds of which came in the past three months.
"Companies are reluctant in the beginning of a recession to lay off workers, but we've seen a sudden, dramatic acceleration in job losses in the last three months," said Baumohl. "Because companies are now in survival mode, they're reducing their most expensive cost, which is labor."
Citing weak economic conditions, a slew of large-scale job-cut announcements came this week. On Thursday alone, AT&T (T, Fortune 500), DuPont (DD, Fortune 500), Viacom (VIA), Credit Suisse (CS) and Avis (CAR, Fortune 500) issued statements that totaled nearly 23,000 jobs lost, most of which will take place over the next several months.
According to a report by outsourcing agency Challenger, Gray & Christmas, planned job cut announcements by U.S. employers soared to 181,671 last month, the second-highest total on record.
Temporary employment, including workers employed by temp agencies, fell by 100,700 jobs last month, according to the Labor Department report. It was the highest level on record, which goes back to 1985.
That could mean even more full-time payroll reductions to come, as employers often cut temporary workers before they begin cutting permanent staff.
"CEOs are trying to get their businesses better positioned for the start of the year so they're not constantly chasing the slowdown," said Tig Gilliam, chief executive of placement agency Adecco, the nation's third-largest employment agency. "December will be another very tough month."
Unemployment rate to spikeThe unemployment rate will likely rise throughout 2009 as well. According to the government's report, the unemployment rate rose to 6.7% from 6.5% in October. It was the highest unemployment rate since October 1993.
Experts call the rate of unemployment a "lagging indicator," meaning it reflects the status of the labor market from many months ago. That's because the Labor Department only calculates the percentage of people that are unemployed who are actively looking for work.
"The economy is really sick, and when times are bad, people quit looking for work," said Dan Seiver, finance professor at San Diego State University. "When times are better, it will pull some of those people back into the search, and it would be hard to believe the rate won't rise to at least 8%."
Some economists look to the so-called under-employment rate to give a more accurate portrayal of the job market. The under-employment rate counts part-time workers who are unable to find full-time work as well as those without jobs who have become discouraged and stopped looking for work. That figure soared to 12.5% from from 11.8%, setting the all-time high for that measure since calculations for it began in January 1994.
As a result, some economists see the headline unemployment rate rising to the double-digit levels of the early 1980s.
This year is on a pace to become the worst year for jobs ever, based on records that date back to 1939. Some see even steeper losses in 2009 - but don't expect this recession to bring job-loss levels anywhere near the Great Depression, when the unemployment rate spiked to 25%.
"This recession will last through 2009 and into early 2010, and it will probably be the worst period for jobs since the Great Depression," said Baumohl. "But by a great magnitude the Great Depression was so much worse, and we will never approach those levels."
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