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US sheds 533,000 jobs, unemployment rate 6.7 pct

The monthly report on nonfarm payrolls, seen as one of the best indicators of economic momentum, highlighted the severe retrenchment by companies in the face of a struggling economy and tight credit.

The number of job losses was much higher than the 325,000 expected by private forecasters.

The report also included a sharp upward revision in the number of job losses in the prior two months: October saw a loss of 403,000 jobs (up from an earlier estimate of 240,00) and September job losses were revised up to 320,000 from 284,000.

“There is no sugar-coating this data,” analysts at Briefing.com. “It is bad news that will weigh heavily on consumer sentiment and will serve to increase concerns about the depth and length of the current slowdown.”

Sophia Koropeckyj at Economy.com said that losses “were broad-based across both service-producing and goods-producing industries” and the worst single-month decline since 1974.

“The economy is in recession, and the severity will far surpass the depths of the last two recessions.”

The jobless rate, based on a separate survey of households, was the highest since October 1993 but slightly better than the consensus estimate of economists of 6.8 percent.

The Labor Department noted that since the official onset of recession in December 2007, some 2.7 million jobs have been lost, and the unemployment rate rose by 1.7 percentage points.

In November, the report showed a loss of 85,000 jobs in manufacturing, bringing the total in the sector to 604,000 over the past 12 months, despite a return of 27,000 aerospace workers from strike.

Employment in the retail sector fell by 91,000, and the leisure and hospitality sector shed 76,000 jobs.

The troubled financial sector shed 32,000 jobs in month, bringing the 12-month total losses to 142,000.

The National Bureau of Economic Research (NBER), the panel recognized as the official arbiter of business cycles, said this week the US entered recession in December 2007.

Although a recession is generally defined as two consecutive quarters of declining activity, the panel has its own criteria for determining a downturn, including data on employment, income and industrial output.