Employers in the US cut jobs at the fatest rate in 34 years last month, bringing the unemployment rate to a 15-year high.
Payrolls shrank by 533,000 workers in November, the biggest loss since December 1974 and significantly worse than economists had forecast, according to figures released by the Labor Department. Economists were expecting a decline of 335,000 jobs, according to a Bloomberg survey.
The numbers for October were also revised, bringing jobs cuts for that month to 320,000 versus a previously reported 240,000.
The jobless rate rose to 6.7 per cent, the highest level since 1993, and is likely to keep rising as corporate America continues to shed jobs. On Thursday, AT&T said it would cut 12,000 jobs, while Credit Suisse said it would slash its workforce by 11 per cent.
Factory payrolls fell 85,000 after decreasing 104,000 in October, compared with a forecast of 100,000. The return of 27,000 striking machinists at Boeing last month helped limit the drop, economists told Bloomberg.
Service industries – which range from banks and insurance companies to restaurants and retailers – cut 370,000 workers last month, the bulk of the jobs lost.
But education and health services industries added 52,000 jobs and government payrolls increased by 7,000.
The numbers rattled traders, even the more pessimistic of whom seem to have been wrong-footed.
In the currency markets, the dollar dropped 0.1 percent to 92.10 yen in the minutes following the data release versus 92.23 yesterday. In the UK, the FTSE dropped 96.88, or 2.3 percent, to 4,066.73.
Related links:
Fourth Quarter Layoffs: Selection of Job Cuts by Major Companies (Interactive table) – WSJ / Real Time Economics
Using ISM to predict NFP – Bond View