The report was more dire than expected. Economists had forecast a cut of 320,000 jobs.
“These numbers are shocking,” said economist Joel Naroff, president of Naroff Economics Advisors, according to the Associated Press. “Companies are sharply reacting to the economy’s problems and slashing costs. They are not trying to ride it out.”
The rise in the unemployment rate, however, was slightly less drastic than the 6.8 percent economists expected.
The rate would have climbed even higher if not for the exodus of 422,000 people from the work force. Economists thought many of those people probably abandoned their job searches out of sheer frustration. In November 2007, the jobless rate was at 4.7 percent.
The U.S. tipped into recession last December, a panel of experts declared earlier this week, confirming what many Americans already thought. Since the start of the recession, the economy has lost 1.9 million jobs, the number of unemployed people increased by 2.7 million and the jobless rate rose by 1.7 percentage points.
President George W. Bush appeared on the White House lawn Friday morning to address the new report.
“Today’s job data reflects the fact that our economy is in a recession,” the president said in his statement. “I’m concerned about our workers that have lost jobs during this downturn.”
President Bush said the most urgent issues was frozen credit markets that prevent consumers and businesses access to credit. He acknowledged there is still more to be done and it will take time, but said there were “encouraging signs” that credit markets were beginning to thaw.
He also mentioned his concerned for the domestic auto industry and auto workers as the CEOs of the Big Three, General Motors, Chrysler and Ford appear before Congress to appeal for federal aid.
“It important that Congress act next week on this plan. And it is important to be sure that taxpayers money be paid back if any is given to the companies,” President Bush said.
President-elect Barack Obama, who will take office in January, said the dismal job news underscored the need for forceful action, even as he warned that the pain could not be quickly relieved.
“There are no quick or easy fixes to this crisis … and it’s likely to get worse before it gets better,” Mr. Obama said. “At the same time, this … provides us with an opportunity to transform our economy to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early down payment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come.”
The chairman of the House Financial Services Committee said Friday the new bleak unemployment figures makes helping the beleaguered domestic auto industry even more urgent and cautioned colleagues that doing nothing “would be a disaster.”
“For us to do nothing, to allow bankruptcies and failures in one or three of these companies in the midst of the worst credit crisis and the worst unemployment situation that we’ve had in 70 years would be a disaster,” Frank said ahead of testimony from the CEOs of General Motors Corp., Ford and Chrysler LLC.
The job reductions were the most since a whopping 602,000 positions were slashed in December 1974, when the country was in a severe recession.
An hour into trading on Friday, the Dow Jones industrial average, the Standard & Poor’s 500 Index and the Nasdaq were all down more than 2 percent.
As of November, 10.3 million Americans were left unemployed while the number of employed was 144.3 million. Jobs were cut in factories, construction companies, financial firms, retailers, hospitality industry and other sectors while government, education and health services gained positions.
The report adds to a string of months with high jobs cuts. Employers cut 403,000 jobs in September and 320,000 in October, both higher than economists had forecast.
“This jobs picture painted today is staggering, and it should be all the evidence Washington needs to act swiftly and decisively to shore up this economy,” said Sen. Charles Schumer, D-N.Y., chair of the Joint Economic Committee.
The news follows days of layoff announcements from large companies including AT&T Inc., DuPont, JPMorgan Chase & Co., Pratt & Whitney, and Freeport-McMoRan Copper & Gold Inc.
Also on Friday, the Mortgage Bankers Association said that a record one in 10 American homeowners with a mortgage were at least a month behind on their payment or in foreclosure as of September.
The Federal Reserve meets on Dec. 16 and is expected to lower the benchmark federal funds target rate to help bolster the economy. The Treasury Department is also weighing new initiatives, though Treasury Secretary Henry Paulson’s
According to the Associated Press, the jobless rate could rise as high as 8.5 percent by the end of next year.