Friday, December 5, 2008

Stocks tumble on dismal job report

Wall Street was thumped by more bleak economic news early Friday, as the government reported the heaviest monthly job loss in nearly 34 years.

The Dow Jones industrial average (INDU), the Standard & Poor's 500 (SPX) index and the Nasdaq composite (COMP) all declined, following the release of a report showing the U.S. economy hemorraged 533,000 jobs in November.

This is the worst monthly job loss since December 1974, eclipsing the 325,000 job cuts which had been expected by economists, according to a consensus of opinion from

The annual unemployment rate, generated by a separate survey, soared to 6.7%.

The U.S. economy has lost 1.9 million jobs through November of this year. More jobs have been lost to date than during the last recession.

"With the loss of over half-a-million jobs just last month, the U.S. job market is now shedding jobs at a truly alarming rate, a rate that is measurably worse than past recessions," said EPI senior economist Jared Bernstein, in an e-mail to "Policy makers need to recognize this as an emergency at the scale of any we've seen in recent years."

"This is a huge number," reacted Robert Brusca, chief economist at Fact and Opinion Economics. He noted that the Labor Department's revisions for October are "even worse" than before.

October job losses were revised up to 320,000, from the previously reported 240,000. September job losses were revised up to 403,000, a huge increase from the previously reported 159,000.

The rate at which employers have been slashing jobs has picked up as the end of the year nears. On Thursday, major companies, including AT&T (T, Fortune 500) and DuPont (DD, Fortune 500), announced more than 20,000 job cuts.

The layoffs caused jitters on Wall Street, and stocks tumbled. The Dow finished Thursday's session 2.5% lower. The S&P 500 lost 2.9% and the Nasdaq shed 3.1%,

Big Three: The CEOs of Detroit's major automakers returned to Capitol Hill for a second day of testimony as they continued to press for government loans to support their ailing businesses. Friday's hearing was before the House Financial Services Committee.

The chiefs of General Motors (GM, Fortune 500), Ford (F, Fortune 500) and Chrysler are seeking a $34 billion bailout from Congress. That's up from the $25 billion in federal loans they requested from Congress just two weeks ago.

World markets: Global investors were wary Friday, and major overseas stock indexes tumbled. In Asia, Japan's benchmark Nikkei index ended the session little changed. The Hang Seng in Hong Kong bucked the region trend and rose 2.5%.

Major exchanges in Britain, France and Germany all fell in midday trading.

Oil and money: The price of crude oil dropped 39 cents in electronic trading to $43.28 a barrel. The dollar rose against the British pound and the euro but was down versus the yen.

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