U.S. Lost 533,000 Jobs in November; Unemployment Rate 6.7%

The Labor Department Friday reported that the American economy lost 533,000 jobs last month, the most in a single month since 1974. The government also reported that the unemployment rate rose to 6.7 percent in the month, the highest rate since 1993.

The large number caught most economists and analysts off-guard. “This is almost indescribably terrible,” wrote Ian Shepherdson, chief U.S. economist at High Frequency Economics, in an analysis note. “The pace of job losses is accelerating alarmingly.”

Economists had been expecting job losses to total around 350,000 for the month. But they also expected the unemployment rate to increase to 6.8 percent. The job loss totals are derived by Labor from a survey of businesses, while the unemployment rate is calculated from data obtained by surveying households.

In addition to the large number of jobs lost in November, Labor reported that massive revisions were made to the job losses originally reported for October and September. The government now says that 403,000 jobs were lost in September and 320,000 in October, much more than originally reported. The economy has lost 1.25 million jobs in the past three months alone.

In 2008 so far, the economy has lost a total of 1.9 million jobs.

“This is really bad news for consumers,” said Dimitri Michaud, consumer finance analyst at Kaulkin Ginsberg. “And when the consumer is stressed this way, it’s never good news for accounts receivable management professionals.”

Michaud pointed out that while the official headline unemployment rate ticked up only .2 percentage points, alternative measures of unemployment – also released by the Labor Department – are growing at a faster rate.

The official headline unemployment rate includes only those people who are not working and are actively looking for a job or were looking very recently. When those that have given up trying to find a job are included, the rate jumps to 7.8 percent, up from 7.5 percent in October. When people that want to work full time but have been forced to work part time are included, the rate swells to 12.5 percent, up from 11.8 percent in October.

“There’s just no way to spin it positively,” said Michaud. “People just aren’t working the way they’d like to right now.”

The job losses in November were broad, touching nearly every sector of the economy. Manufacturing lost 85,000 jobs, Construction jobs were down by 82,000 and Employment and business services jobs were cut by 101,000.

The few bright spots were in Healthcare, Education, and Government, which combined to add 59,000 jobs in the month.