US employers cut jobs in November at the fastest pace in 34 years and the unemployment rate jumped as the year-long recession engulfing the world’s largest economy deepened.
Payrolls plunged by 533,000 last month, the biggest loss since December 1974, after shrinking a revised 320,000 the prior month, the Labor Department said today in Washington.
The jobless rate rose to 6.7 per cent, the highest level since 1993.
Payrolls are likely to keep sliding into next year as the collapse in credit and slump in spending hurt companies from General Motors to Citigroup and AT&T President- elect Barack Obama, confronting what he called a "crisis of historic proportions," announced a plan last week to save or create 2.5 million jobs over two years.
"The labor market capsized in November," Ryan Sweet, a senior economist at Moody's Economy.com in West Chester, Pennsylvania, said before the report.
"The financial panic has hammered the economy and we are seeing a very broad-based decline in payrolls".
Stock futures sank. Contracts on the Standard & Poor's 500 index lost 2.1 per cent to 829.90 at 8.34am in New York.
Payrolls were forecast to drop by 335,000 after declining by a previously reported 240,000 in October, according to the median estimate in the Bloomberg survey. Estimates of the month's job losses ranged from 220,000 to 470,000. The jobless rate was projected to rise to 6.8 per cent.
Revisions for September and October increased job losses by 199,000. The 11th consecutive drop in payrolls brought the number of jobs eliminated so far this year to 1.91 million. Factory payrolls fell 85,000 after decreasing 104,000 in October.
The return of 27,000 striking machinists at Boeing last month helped limit the drop, economists said. Economists had forecast a drop of 100,000 manufacturing jobs. The decrease included a loss of 13,100 jobs in auto manufacturing and parts industries.
Today's report also reflected the housing slump and the worst credit crisis in seven decades. Payrolls at builders dropped 82,000 after decreasing 64,000. Financial firms decreased payrolls by 32,000, after a loss of 31,000 jobs the prior month.
Service industries, which include banks, insurance companies, restaurants and retailers, subtracted 370,000 workers after declining 153,000 in the previous month.
Professional and business services, a category that includes temporary workers, eliminated 136,000 jobs. Retail payrolls decreased by 91,300 after a decline of 62,200. Education and health services industries added 52,000 jobs and government payrolls increased by 7,000.
Bloomberg