The consensus expectation for November, according to Bloomberg, was for a net of 300,000 lost jobs. The holiday season started looking bleaker earlier in the week though, when ADP noted private sector losses at 250K and Goldman Sachs revised its Labor Department estimate to 400K. Challenger, Gray & Christmas also noted November’s planned layoffs up 61%, to 181,671. Friday’s report still knocked the socks off every forecast.
According to Challenger and the Labor Department, job losses were “large and widespread” in November. John Challenger said that while high profile losses continued in the financial and auto sectors, slowing consumer spending was beginning to drive consolidation in other businesses. This means that retailers, hanging on for dear life, will shed significant jobs and consolidate stores post the holidays.
Besides retail, Silicon Valley has been late in swallowing its medicine. Last week though, both Advanced Micro Devices and Research in Motion revised their outlooks. AMD has already shed 2,100 jobs this year. This hit is broad reaching, so both consumer and business investment spending should see impact. Even energy is not safe from recession, because as commodity prices decline, the feasibility of exploration and production decrease.
Manufacturing lost 85,000 jobs in November. December looks about the same, give or take 3 million auto workers. Construction lost 82,000, and as commercial real estate gets worse, this trade group has no place to hide.
Retail trade lost 91,000 jobs in November, after seasonal adjustment. Working in retail now is like being on death row, and your execution is set for January 1st. Professional and business services lost 101K jobs.
Now the good news… Health care employment grew by 34,000. Still, job losses are mounting, and where they are not yet, they will be. This is not as bad as the economy gets folks, but at least the stock market seems to have priced most of it in. Two things it hasn’t priced in yet though threaten ominously before us, bankruptcy in the auto sector and war with Iran. No matter how bad things seem, they can always get worse.