- The Washington Times - Saturday, December 8, 2001

The nation's unemployment rate last month jumped to 5.7 percent its highest point in more than six years as employers shed 331,000 jobs, the Labor Department reported yesterday.
When combined with October's job cuts of 468,000, the two-month job loss was the largest in two decades and undercut predictions that the recession will end quickly next year.
Jobs and incomes, which also are rapidly decelerating, are the key to consumer spending and confidence, which has been hit hard by the darkening job picture in recent weeks.
President Bush called the continued loss of jobs "troubling" and said the report provides an "economic warning" that Washington must act quickly on an economic stimulus bill.
"American workers have waited too long," he said, noting that more than three-quarters of a million people have lost their jobs since he proposed legislation in October.
"The most important thing we can do for unemployed workers and those who are concerned about their jobs is to get the economy growing," he said.
Included in the legislation is an extension of benefits for those unemployed for more than a half year, a provision that is needed by 1.2 million workers, according to yesterday's report. While unemployment has risen sharply across the board, from college graduates to the least-skilled and least-educated, some groups have been hit especially hard.
Unemployment among black workers jumped above 10 percent for the first time in years, and the rate among black teen-agers soared to 33 percent. Analysts said these levels of unemployment, if sustained for long, will foster a return to the social problems of crime and violence seen in earlier eras.
"This is going to be real traumatic" and a shock for the economy in many cities, where blacks only last year enjoyed a record-low unemployment rate of 7.2 percent, said William Spriggs, economist with the National Urban League.
More than half of today's workers particularly many minorities entered the job market since the last recession in 1990-91 and may be largely unprepared for the loss of their jobs, he said. Typically, low-income workers live hand-to-mouth, spending each week's paycheck, with little or no cushion of savings to pay bills when jobs disappear.
Today's social safety net is not as extensive as it was in the past, because of the rise of part-time workers who may not be eligible for unemployment benefits, and the five-year time limit on welfare benefits that Congress imposed in 1996 that is now coming due, Mr. Spriggs said.
A disproportionate number of the 22 million Americans who work part-time are single mothers who support their families, he added.
Consumers also have record debt burdens to shoulder and recently have plunged deeper into debt to finance a binge of spending on cars and other goods. Separate reports from the Federal Reserve yesterday showed that consumer-credit loads climbed by $7 billion last month, while household net worth continued to shrink during the summer quarter because of falling stock prices.
"In a period of rising joblessness and flattening income growth, these debt loads are going to be hard to manage," said William Sullivan, senior economist at Morgan Stanley Dean Witter & Co.
He said the combination of burgeoning debt and rising unemployment will weigh heavily on consumer spending in coming months.
Yesterday's report included several signs that the job market is deteriorating rather than improving after taking what many had hoped would be a one-time hit in the aftermath of the September 11 terrorist attacks, Dean Baker of the Center for Economic Policy Response said.
Manufacturers, who have shed 1.4 million jobs on the factory floor since July 2000, started cutting deeply into their professional and management staffs, suggesting that they do not expect growth to return to pre-recession levels, he said.
Personal and business services usually the fastest-growing sector experienced a first-ever two-month job loss of more than 120,000, he said, while government jobs actually shrank despite the beefing up of defense and security, largely because of cuts in state and local budgets and the devastation of the postal service by anthrax-tainted letters.
Economists noted that yesterday's report could have been worse, had unusually warm weather not prevented the normal seasonal layoff of construction workers. Among the only areas experiencing growth were health care, which added another 32,000 jobs; guard services, which added 15,000 jobs; and auto dealerships, which added 6,000 jobs.
"The optimists have been perhaps a bit too optimistic about how quickly things are turning around," Wachovia Securities analyst Rod Smyth said.

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