National Unemployment Situation Worsens with 524,000 Jobs Lost in December

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Researched by Industrial Info Resources (Sugar Land, Texas)--The sharp increase in the unemployment situation in the United States continued through December 2008, making the year the worst since the end of World War II in terms of total jobs lost. About 524,000 additional unemployed workers added to the total jobs lost during the year in December, driving the unemployment rate to a whopping 7.2%, the highest since 1993. During the final four months of 2008, 1.9 million jobs were lost, according to the most recent Department of Labor statistics.

Both manufacturing and construction jobs took major hits during the final month of 2008. About 149,000 manufacturing jobs were lost, the largest monthly decline since August 2001, while the construction industry added 101,000 jobs to the dismal total, raising the unemployment rate within the construction sector to 15.3%. Factory job losses topped 791,000 in 2008 with nearly half of those losses occurring during the fourth quarter. Since September 2006 almost 900,000 construction jobs have been lost.

Within the manufacturing sector, the largest job losses were felt, once again, in the fabricated metal products sector, down 28,000 jobs for the month, and the motor vehicles and parts sector was down 21,000 for the month. In addition, management job losses were larger than expected in December with 8,000 management positions being eliminated. Architectural and engineering job losses were also up during the month as 7,000 jobs were lost in that sector. The only real employment highlight for the month was the 45,000 jobs created in the education and health services sector.

As spending continues to decline in most sectors coming into 2009, the unemployment news is not expected to get much better in the near future. This puts increasing amounts of pressure on President-elect Obama and the new Congress to put together some kind of stimulus package sooner rather than later. Analysts are predicting that at least another 1 million-1.5 million jobs will be lost through the end of March before the unemployment situation begins to stabilize. By June, job losses are expected to retreat to the 200,000 per month.

While the proposed tax cuts are expected to have only marginal impact on the recession facing the nation, the jobs program aimed at the infrastructure sector of the country could help the unemployment situation significantly by the end of 2009. This would be especially true within the construction sector, where workers are itching to get back to work. The real problem becomes the length of time it will take to not only get some form of stimulus passed but implemented. The immediate need for jobs will not be quenched by any kind of package passed in the next few weeks. It will take several months for the affect to truly be felt.

Industries across the board have been streamlining operations for months now, contributing heavily to the massive monthly unemployment numbers. Hopefully, the majority of this streamlining is completed now, or will be completed within 90 days so the nation can truly begin the process of replacing these jobs. However, for this to happen, spending will have to be cranked up and that will take some time. In addition, the failing American automotive sector may well contribute more jobs to the unemployment numbers in the coming months as they begin their governmentally mandated restructuring by April 1, 2009.

The first quarter of 2009 will give us a good indication of where things are heading not only in terms of unemployment but also in terms of overall spending within the manufacturing sector. If spending can be increased, the unemployment numbers will decrease, especially among the construction sector. However, for this to happen, companies will need to have reached the bottom of their streamlining programs and there are no indications that this will occur until at least April.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process, energy and financial related markets with products and services ranging from industry news, analytics, forecasting, plant and project databases, as well as multimedia services.