- The Washington Times - Friday, January 9, 2009

UPDATED:

The nation’s unemployment rate soared to a 15-year high of 7.2 percent last month as businesses laid off another 524,000 workers in nearly every industry from manufacturing to retailing, the Labor Department reported Friday morning.

The huge job loss in December follows an ever bigger 584,000 job drop in November and brings to nearly 2 million the number of people who have lost jobs just in the last four months since a severe financial crisis struck in the United States. The total of jobs lost last year was 2.6 million.

The report showed stunning weakness in the job market that economists fear will set off another downward spiral in the economy by prompting people, worried about their jobs, to further downshift consumer spending from levels that already are the worst in four decades.

The average workweek fell to a record low of 33.3 hours, as employers slashed hours as well as jobs in their scramble to bring costs in line with plummeting sales and revenues.

“The U.S. labor market has finished its worst year since 1945,” said Harm Bandholz, economist at Unicredit Markets. “Most stunning is the deterioration of the situation in the fourth quarter.”

December’s debacle capped what is likely the worst quarter in the recession, Mr. Bandholz said. The only areas that weren’t ravaged with job cuts were health care, education and government, which managed to eke out small job gains despite a hemorrhaging of revenues from the weakening economy.

The surge in unemployment affected all workers, from adult men to Hispanic teenagers. The unemployment rate has spiraled at breath-taking speed not seen since the deep 1980 recession from 4.9 percent at the start of the current recession in December 2007.

While the December jobs report was dismal for workers, it was not quite as bad as many on Wall Street feared. A series of dire reports signaling big job losses during the month had led some forecasters to predict job losses as high as 750,000 during the month.

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