Big companies lost 30,000 jobs yesterday. Those are the public companies which had to come clean. Who knows how many jobs were lost at smaller companies. Businesses with under 100 people supposedly have over 50% of the employees in America. Their lack of access to credit should make them even more vulnerable to cost cuts.
The government announced the November unemployment figures today. Over 500,000 more people were put out onto the streets during the month and the jobless rate went to 6.7%.
That is only a modest part of the entire employment story.
The government announces what it calls "non-farm" payroll numbers. It is important to remember that America still has farms and that falling commodities prices are putting some of those people out of work. There are also the hundreds of thousands of people who fall into the category of those no longer looking for work. That is another 3% or 4% of the workforce. When it comes to need for social services and a shrinking tax base it is impossible to say that they should not be "counted".
At this point, especially if the number of unemployed based on the government’s measure moves up by 400,000 for November, there is every reason to think the figure is accelerating. Economic contraction measured by factory output, retail sales, and the purchase of capital goods is still tightening. The announcement of job cuts at companies may be delayed until after Christmas to avoid the despair of going through a holiday just after being fired. Santa may have some practical role in the world after all.
Looking at the situation with a jaundiced eye, by January the economy should be bleeding out 20,000 jobs a day, 600,000 a month. How long that lasts depends on whether any of the government economic programs works and whether labor gets so cheap that companies feel compelled to hire people because the costs of getting workers may not be so low again in a generation.
To get to the unemployment level of 1982, a little over 10%, will require a sharp jump in the rate at which poor souls are put out into the cold. Most economists think the present troubles look worse than in the early Eighties.
The November unemployment numbers may be the best America sees for some time
Douglas A. McIntyre