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The Labor Department report showed the nation’s unemployment rate bolted to 7.2 percent in December, the highest level in 16 years, as employers slashed 524,000 jobs. The labor market is expected to remain weak as mass layoffs continue.
In 2008, the economy lost a net total of 2.6 million jobs, the most since 1945, when nearly 2.8 million jobs were lost, though the number of jobs in the U.S. has more than tripled since then.
The 7.2 percent unemployment rate is up from 6.8 percent in November. It is the highest since January 1993. All told, 11.1 million people were unemployed in December.
Job losses in both October and November turned out to be worse than previously estimated. Revised figures showed that employers slashed 584,000 positions in November and another 423,000 in October.
Job losses were widespread in December. Construction companies slashed 101,000 jobs, and factories cut 149,000 jobs. Professional and business services got rid of 113,000 jobs. Retailers eliminated nearly 67,000 jobs, and leisure and hospitality reduced employment by 22,000. All told, those losses dwarfed gains in education, health care and government.
“If nothing is done, this recession could linger,” Mr. Obama said Thursday. “The unemployment rate could reach double digits.”
Some economists believe the unemployment rate could hit 9 percent or 10 percent at the end of this year, even with a government stimulus and all-time low interest rates, reported the Associated Press.
Mr. Obama, who takes over Jan. 20, his economic team and Democratic congressional leaders are working to finalize a stimulus package proposal, which is expected to total nearly $800 billion. With add-ons by lawmakers, the package could swell to $850 billion, his advisers say, according to the AP.
They hoped to have the package approved by Congress by Inauguration Day. However, that timeline has slipped into at least mid-February.
“We’ve asked for a recovery package for over a year now with some of the elements that President-elect Obama is proposing,” House Speaker Nancy Pelosi, D-Calif., said Thursday on the NewsHour. “And I do agree that we must act and we must act now. … And if we do not have agreement and a bill by [the Presidents’ Day recess], we won’t have a recess. We cannot leave here without an economic recovery package for the American people, because, as the president-elect has said, the consequences are very severe.”
The package is expected to include tax cuts for businesses and middle-class workers, money to assist states with Medicaid and other costs, and a large share for infrastructure building, investments in energy efficiency and a rebuilding of information technology for health care.
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