By Glenn Somerville
WASHINGTON (Reuters) – The U.S. economy shed jobs at a searing pace for a second month in a row during November as the unemployment rate shot up to its highest level in more than six years, the government said on Friday in a report implying the recession may bite deeper and longer than thought.
The Labor Department (news – web sites) said another 331,000 nonfarm 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. Previously, the department said 415,000 jobs were shed in October.
The unemployment rate climbed to 5.7 percent in November from 5.4 percent in October. That is the highest jobless rate since a matching 5.7 percent in August 1995.
The shocking report comes just days before Federal Reserve (news – web sites) 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.
WORST LOSSES IN TWO DECADES
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. October’s losses were attributed partly to the aftermath of the Sept. 11 attacks but the report suggested the cycle of job losses may take some time to staunch.
Bond prices surged after the data was issued, a sign worried investors were battening down the hatches by seeking the safest possible harbor for their money.
The dollar’s value suffered as currency markets reassessed prospects for the world’s largest economy, which most analysts were speculating might have to endure only a relatively mild recession before resuming growth early in 2002.
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 of 124,000 in October.
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