Half-Million November Job Losses Worst In 34 Years

And the financial hits keep on coming: a new Labor Department report says more than half a million jobs were lost in November — making it the worst job loss in 34 years.

The economy shed 533,000 jobs in November, according to a government report Friday – bringing the year’s total job losses to 1.9 million.

November had the largest monthly job loss total since December 1974.

“This is a dismal jobs report,” said Keith Hall, commissioner of the Bureau of Labor Statistics, at a congressional hearing. “There’s very little in this report that’s positive. This is maybe one of the worst jobs reports the Bureau of Labor Statistics (founded in 1884) has ever produced.”

The just-under 1.9 million jobs lost in the current recession, which began in December 2007, surpasses the 1.6 million jobs lost in the 2001 recession. That’s noteworthy, because jobs were cut in droves in 2001 during the dot.com bust, which followed a white-hot employment market during the tech boom of the late 1990s.

In financial terms the question becomes: will this spark yet another massive Wall Street tumble? And in political terms the question becomes: how many talk show hosts will say this is due to fears about Barack Obama or really due to the Clinton administration? (Stay tuned).

But the actual news coming out is increasingly grim:

*Wall Street has started to react:

U.S. stocks were climbing off their lows but still trading in the red Friday, after the Labor Department announced that the economy lost more than half a million jobs in November, an even more dire decline than had been anticipated.

The Dow Jones Industrial Average was down 126 points to 8249, and the S&P 500 gave back 12 points to 832. The Nasdaq stumbled 14 points to 1430.

Before trading commenced, the government reported that the unemployment rate reached a 15-year high of 6.7% in November, up from 6.5% in October but slightly below the 6.8% analysts had expected. Nonfarm payrolls showed a loss of 533,000 jobs, a much greater decline than the drop of 335,000 forecast by economists.

The September and October job-loss figures were also worse than previously thought. The September number was revised to 403,000 from 284,000, and October job losses were up to 320,000, up from an initial reading of 240,000.

*The NY Times reports that some see this as a virtual collapse:

The alarming job decline suggests that consumers and businesses have pulled back sharply on spending in response to the worsening credit crisis. That has put pressure on Congress and the White House to come up with a stimulus package that would substitute for the missing private sector outlays.

Over all, the losses since the recession began now total about 1.9 million, with most coming in the last three months.

“We have gone from recession into something that looks more like collapse,” said Ian Shepherdson, chief domestic economist at High Frequency Economics, referring to the accelerating job losses in recent month.

The losses in November far exceeded the 350,000 figure that was the consensus expectation of economists.

“Business shut down in November,” said Mark Zandi, chief economist at Moody’s Economy.com. “Businesses are in survival mode and are slashing jobs and investment to conserve cash. Unless credit starts flowing again soon, big job losses will continue well into next year.”

*Real Time Economics says the actual picture is even worse than these reports since the focus is on one number, but when other categories and factors are added the picture is more alarming:

That rate (called “U-6”) in November? A whopping 12.5%.

The U-6 rate only has comparable history back to 1994, but November’s rate is by far the highest since then and the swift rise to that elevated level also far surpasses similar moves during the recessions in 2001 and 1990-91. Previously, the Labor Dept. kept a similar gauge with history back to 1970, showing a high of 14% unemployment during the deep recession in 1982.

The U-6 rate rose sharply in November, from 11.8% in October, and is markedly higher now than the 8.4% recorded in November 2007.

“It was already clear that this would be ‘one of the worst recessions’ in the post-war period,” said Nigel Gault, chief U.S. economist at IHS Global Insight. “After today’s horrendous November employment report, it is beginning to look like the worst.”