Bad as the December unemployment numbers are, if you include temporary workers and discouraged workers, the situation is far worse. Hat-tip to Larry Peterson for the links that follow the WSJ excerpt.
Jobless Rate Surges to 7.2% in December
By BRIAN BLACKSTONE | January 9th, 2009
WASHINGTON — The final employment report for 2008 closed the books on a miserable year for U.S. workers with payrolls plunging last month by more than half a million, pushing the unemployment rate to a 16-year high.
The economy lost 2.6 million jobs in 2008, government figures showed, the most since World War II ended in 1945. Nearly two million of those losses were in the last four months alone, a sign that the recession accelerated as the financial crisis intensified, and should drag on well into the new year.
The figures will likely put pressure on Federal Reserve officials to expand their already aggressive quantitative easing steps in which cash is essentially created and pumped into the economy, and gives backing to those calling for large-scale fiscal stimulus.
Nonfarm payrolls, which are calculated by a survey of establishments, tumbled 524,000 in December, the U.S. Labor Department said Friday, the 12th-straight decline and in line with the 525,000 drop Wall Street economists in a Dow Jones Newswires survey expected. November was revised to show an even steeper decline of 584,000, the most since 1974.
Read the rest of the article.
From Across the Curve:
HSBC on the Labor Report
* The unemployment rate jumped higher in December, rising to 7.2% (consensus 7.0%) from 6.8% in November (Nov upwardly revised from 6.7%). Nonfarm payrolls in December matched expectations at -524k (consensus -525k), but there were net revisions of -154k to the previous two months. Hourly earnings rose 0.3%.
* The unemployment rate increase (7.192% from 6.775% unrounded) was driven by a massive 806k decline in the household measure of employment. The labor force fell 173k, as the participation rate dropped to 65.7% from 65.8%, the lowest in over a year. The rise in unemployment therefore can not be blamed by a surge in recent job seekers.
* However, the total pool of available labor (which also includes marginally attached workers who have searched for work in the past 12 months but not the past 4 weeks) rose by 583k. On this basis,the augumented unemployment rate rose to 10.4% from 9.9% in November.
* Meanwhile, the number of persons forced to take part-time work due to economic reasons rose 715k up to 8.048mn, 72% higher from a year ago. In other words, this report shows a consistent picture of labor force weakness in a wide variety of metrics.
* The payroll diffusion index fell to 25.4 from 27.2, showing industry cutbacks remain broad-based. There are no major surprises in the category mix, with big payroll declines in constructions -100k, manufacturing -149k, and retail -66k, and temp help -81k.
* Aggregate hours worked fell 1.1%. The biggest drop was in autos (-4.3%), where end-of-year production stoppages started earlier than usual in December. But the decline in hours was also across the board in overall manufacturing (-2.4%) as well as in services. Industrial production is likely to decline accordingly next in next week’s release, mititgated only by a recovery from the Boeing strike.
And this from Brad DeLong:
And U-6–unemployed plus discouraged workers plus unable to fond a full-time job–is now at 13.5% of the labor force–and BLS “discouraged workers” are a big undercount of the concept…