Coming on the heels of layoff announcements by major corporations, including AT&T, Labor Department reports released today show that employers cut 533,000 jobs in November, increasing the unemployment rate to 6.7 percent.
The cuts mark the largest one-month decline in employment since December 1974. And the number is much higher than analysts expected; they predicted a loss of 320,000 jobs.
The unemployment rate, meanwhile, hit its highest level in 15 years. The data also suggest that of the 430,000 Americans who had been working or seeking work in October and left the workforce in November, many were people who simply gave up looking for a job. If they'd had kept looking, the unemployment rate would be closer to 7 percent.
The news indicates an acceleration of the economy's contraction—meaning that the recession may last even longer than many had feared. Analysts say that could make it the longest recession since the Depression, perhaps outlasting the 16-month recessions of the mid-1970s and early 1980s.
That's something that other sectors of the economy are showing, too. Reports released yesterday showed that retailer's November sales registered the largest one-month decline in more than three decades, with sales falling 2.7 percent overall.
On top of family budgets being squeezed, one problem is the tightening of the credit market. That has led consumers to leave their credit cards at home—making it difficult for stores to sell their products. Circuit City has even blamed the credit crisis for having to file for bankruptcy protection last month.
Some analysts, however, predict that retail has hit rock bottom. The lack of purchasing has led to pent-up demand, they say, and December sales, while unlikely to be rosy, will probably be better than November's.