David Pleasant

If the sheer number of job cuts reported by the government yesterday for November  wasn’t enough shock and awe for you, then maybe Paul Krugman’s comments today will help get you past that threshold. Now that he’s had a chance to review the numbers, he says the economy “is falling off a cliff.”

It’s definitely a bad news Friday. According to a new government report released today, 533,000 U.S. jobs vanished last month. That brings us to a grand total of 1.9 million jobs lost since the recession began 12 months ago. Moreover, the national unemployment figure is now formally set at 6.7 percent. But fear not, it won’t remain there long. Anyone want to take double-digits by March?

Now, look at when the real slide in unemployment began to occur. Of the 1.9 million jobs lost over the past 12 months, 1.3 million, or approximately 67 percent, were lost in the last three months (September – 403,000, October – 320,00, November – 533,000). If that’s not a nosedive, I don’t know what is. And it’s just going to get worse, especially if you believe Paul Krugman.

When Krugman says he’s scared, well, I’m something beyond whatever he is. This is what he had to say today:

I’ve been ruminating over economic prospects for next year, and I’m getting scared.

Two points:

1. The economy is falling fast. We’ll see what tomorrow’s employment report says, but we could well be losing jobs at a rate of 450,000 or 500,000 a month.

2. Infrastructure spending will take time to get going – a new Goldman Sachs report suggests that projects that are “shovel-ready” are probably only a few tens of billions worth, and that a larger effort would take much of a year to get going. Meanwhile, it’s very questionable how much effect tax rebates will have on consumer demand. So it may be hard for stimulus to get much traction until late 2009 – and that’s even if Congress goes along, which may be a problem given all the bad analysis and disinformation out there.

So here’s what I’m wondering: will it, in fact, even be possible to pull the economy out of its nosedive before unemployment goes into double digits? I’m starting to wonder. [my emphasis]

I’d like to know what Krugman means by double digits. During the Depression, unemployment was at approximately 25 percent. So, where in that range of 10 percent to 25 percent is Krugman reflecting upon?

Finally, where’s the good news? There are 46 days remaining in George Bush’s presidency. Actually, I think that’s equally as bad news as it is good news. If not worse.

What the Dow does on a single day is by no means a measure of things to come, but it seems remarkable to me that the Dow closed 172 points higher today given the bad unemployment news announced earlier.

Dow Jones Industrial December 3, 2008

The economy continues in a free-fall. According to a newly released report, job cuts in November increased 148 percent from the same period last year. Although Obama is doing the best he can to instill confidence, he’s not the president yet, and George Bush is tied up with more important matters: blaming the recession, the war, and everything else on everybody but himself.

Via CNBC:

November layoffs at U.S. firms surged to their highest monthly level in nearly seven years during November, led by the financial and auto sectors, according to separate reports released Wednesday.

Job cuts announced in November totaled 181,671, up 61 percent from October and 148 percent higher than November 2007, when job cuts totaled 73,140, outplacement firm Challenger Gray & Christmas said in a report released on Wednesday.

A separate report by ADP Employer Services put the November job cuts at 250,000 jobs.

The November planned layoffs was the largest monthly toll since January 2002, when employers announced a record 248,475 planned layoffs.

The most dramatic job cuts cited for November was Citigroup’s plan to reduce its payroll by 52,000 employees.

Overall, financial sector layoffs announced totaled 91,356 in November, the report said.

Late Update:  The New York Times is reporting “some analysts now think as many as 500,000 jobs may have been lost in November alone, making it the worst month yet in the current recession.”