Nov. Unemployment Rate Jumps to 5.7 Percent, Another 331,000 Jobs Lost
In the second consecutive month of massive job losses, the nation's unemployment rate shot up again in November to 5.7 percent, the highest level in six years, as the weak economy continued to stagger from the blow delivered by the Sept. 11 terrorist attacks.
The Labor Department said another 331,000 jobs were lost last month — far worse than the 189,000 that Wall Street economists had anticipated — on top of a revised 468,000 that were cut in October.
The government said that since March, when the nation's first recession in a decade began, 1.2 million Americans have lost their jobs. The October and November job losses were the worst for any two months in more than 20 years, since May and June of 1980, department officials said.
The unemployment rate climbed to 5.7 percent in November from 5.4 percent in October. That is the highest level of unemployment since a matching 5.7 percent rate in August 1995, the department said.
The shocking report comes just days before Federal Reserve policymakers are scheduled to meet to consider interest-rate strategy. The Fed has reduced rates 10 times already this year and analysts said the bleak figures made an 11th reduction a virtual certainty, with the only question being its size.
"We were set up for strength but we got weakness. The details are not pretty,'' said economist Christopher Low of First Tennessee Capital Markets in New York.
"I think this is going to make the market think about leaning toward a (half-percentage) point cut. It definitely takes no cut off the table,'' he said.
Before the report many economists had been expecting the Fed to trim rates by a modest quarter-point.
Rate Seen Peaking Next Summer
Service-producing industries that were the engine of the job boom during the record 10-year expansion that ended in March cut jobs for a third straight month in November, letting go 164,000 workers after a huge job loss of 327,000 in October. The hemorrhaging of factory-sector jobs worsened in November as another 163,000 jobs were cut on top if 124,000 in October.
Economists fear that thousands more will be thrown out of work even if the country is able to mount a sustainable recovery in the first half of next year. Many analysts are forecasting that the jobless rate will peak at 6.5 percent next summer.
That would still be better than the 7.8 percent unemployment level hit during the last recession in 1990-91.
Reuters and the Associated Press contributed to this report.