Worst US job losses since 1974 reported

US COMPANIES suffered the biggest job losses in more than 30 years last month, underscoring the depth of a recession that is spreading rapidly from financial centres to most parts of the global economy.

Non-farm payrolls were cut by 533,000 jobs in November, far worse than most economists expected – the median forecast was that employers would shed about 340,000 positions. The bad news capped a week of poor data from advanced economies and a string of emergency rate cuts in Europe.

The report marked the 11th consecutive month of job losses in the US economy, highlighting the severe impact the downturn is having on the labour market. Economists were shocked by the data, which showed jobs being lost in all sectors of the economy.

“This is almost indescribably terrible,” said Ian Shepherdson, chief US economist at High Frequency Economics. “In the past six months the US has lost 1.55 million jobs, almost as many as were lost in the whole 2001 recession.”

With upward revisions to both September and October showing sharper job cuts than previously reported, the economy has lost more than 1.2 million jobs in the last three months alone, bringing the tally for the year to about 1.9 million, the data showed.

October’s job losses were revised to show a fall to 320,000 compared with a previously reported loss of 240,000, while September’s losses were revised up to 403,000 from 284,000.

November’s job losses are the highest since December 1974. The month’s unemployment rate, which rose to 6.7 per cent from 6.5 per cent in October, was the highest reading since 1993, having risen 1.7 percentage points since December last year.

Service sector employment fell 370,000 in November while retail cut 91,000 jobs – further underlining the slowdown in consumer spending. But the job losses cut across a broad range of sectors, from manufacturing to construction to services.

However, in contrast to most industries, healthcare added jobs in November, with jobs rising 34,000, an increase of 341,000 so far this year.

The figures from the labour department came after the US Mortgage Bankers’ Association reported a record number of borrowers falling behind on their payments in the third quarter.

President-elect Barack Obama said there were “no quick fixes”.

Fears that the third-worst US jobs figures since 1950 reflected a persistent global malaise rocked equities.

The FTSE Eurofirst 300 index lost 4.16 per cent. In New York, the SP 500 index rallied, reversing an earlier slide. – (Financial Times service)