The US economy probably lost more jobs last year than in any year since the end of World War II as firings rippled from homebuilders and automakers to banks and retailers, a government report may show this week.
Payrolls fell 500,000 last month, bringing last year’s decline to 2.4 million, the most since 1945, according to the median estimate of economists surveyed by Bloomberg News ahead of Labor Department figures due out on Friday. The unemployment rate likely jumped to the highest level since 1993.
The figures will underscore the urgency behind US president-elect Barack Obama’s plan to pass a stimulus package that will create jobs and mitigate the recession, already the longest in a quarter century. Other reports may show slumps in housing, manufacturing and service industries deepened at the end of last year, setting the stage for more weakness this year.
PHOTO: AFP
“We’re continuing to lose massive amounts of jobs,” said Michael Feroli, an economist at JPMorgan Chase & Co in New York. “The negative momentum carrying over into the first half of 2009 will hold down the economy regardless of policy.”
The unemployment rate probably climbed to 7 percent last month from 6.7 percent the prior month, the survey median showed.
Manufacturers probably cut 103,000 workers from payrolls, the report may also show. Factories, which make up 12 percent of the economy, shrank last month at the fastest pace in 28 years as new orders for products from cars to furniture reached the lowest level since records began in 1948, the Institute for Supply Management reported last week.
AUTO BAILOUT
The Bush administration agreed last month to give General Motors Corp and Chrysler LLC US$13.4 billion in federal loans to avert bankruptcy. GM, whose shares slid 87 percent last year — the most among the 30 companies in the Dow Jones Industrial Average — and Chrysler probably led a drop last month in US auto sales that capped the industry’s worst year since 1992, the average forecast of analysts surveyed showed.
The Tempe, Arizona-based ISM’s report on services, covering the rest of the economy, is due tomorrow. That index likely dropped last month to the lowest level since records began in 1997, the survey showed, as Americans cut back during what may have been the worst holiday shopping season in four decades of record keeping.
Electronic Arts Inc, the second-largest video-game publisher, last month boosted planned job cuts to 1,000, or 10 percent of its workforce, and said it would consolidate or close at least nine studio and publishing locations.
“Labor-market conditions have deteriorated,” US Federal Reserve policy makers said last month when they cut the benchmark interest-rate target to as low as zero.
The central bank has also said it would buy debt as the next step in combating the recession, now in its 13th month. Minutes of the Fed’s Dec. 16 meeting will be released tomorrow.
OBAMA’S PLAN
Obama has pledged to invest in roads, schools and the US energy network, something akin to the 1950s-era interstate highway construction boom. The package, aiming to create or save 3 million jobs, may be worth as much as US$850 billion.
The economy is still weighed down by housing, which is sliding into a fourth year of decline as foreclosures mount, prices drop and some buyers have trouble getting financing.
Fewer Americans signed contracts to buy previously owned homes last month, a report from the National Association of Realtors due out tomorrow may show. A decline would be the fourth in the past five months.
Today, a Commerce Department report may show construction spending fell 1.3 percent in November after dropping 1.2 percent the prior month, the median forecast showed.
Another Commerce report the following day may show orders placed with US factories fell 2.3 percent in November after a 5.1 percent drop in October that was the biggest in eight years, the survey showed.
As eight basketball-playing international students appealed to the Taiwanese basketball industry after they were excluded from the draft of an upcoming new league merging the P.League+ and the T1 League, the new league’s preparatory committee spokesperson Chang Shu-jen (張樹人) yesterday said the committee would tomorrow discuss the supplementary measures and whether the international students can join the draft. The students on Tuesday called for support on their right to play in the upcoming new league, after a merger involving the two leagues impacted their eligibility for the draft. The international players from the University Basketball Association (UBA), led by first pick prospect
WARNING: China has stepped up harassment of foreign vessels after its new regulation took effect last month, an official said, citing an incident in the Diaoyutai Islands The Coast Guard Administration (CGA) yesterday linked China’s seizure of a Taiwanese fishing vessel illegally operating in its territorial waters to Beijing’s new regulation authorizing the China Coast Guard to seize boats in waters it claims. Chinese officials boarded and then seized a Taiwanese fishing vessel operating near China’s coast close to Kinmen County late on Tuesday and took it to a Chinese port, the CGA said. The Penghu-registered squid fishing vessel Da Jin Man No. 88 (大進滿88) was boarded and seized by China Coast Guard east-northeast of Liaoluo Bay (料羅灣), 17.5 nautical miles (32.4km) from Taiwan’s restricted waters off Kinmen,
Some foreign companies are considering moving Taiwanese employees out of China after Beijing said it could impose the death penalty on “die-hard” Taiwanese independence advocates, four people familiar with the matter said. The new guidelines have caused some Taiwanese expatriates and foreign multinationals operating in China to scramble to assess their legal risks and exposure, said the people, who include a lawyer and two executives with direct knowledge of the discussions. “Several companies have come to us to assess the risks to their personnel,” said the lawyer, James Zimmerman, a Beijing-based partner at the Perkins Coie law firm. He declined to identify
BOLSTERING DEFENSE: The explosive is 40 percent more powerful than those in use and could be deployed for Hsiung Feng II and III missiles, a government source said The Chungshan Institute of Science and Technology has developed a polycyclic nitroamine explosive, commonly known as CL-20, which is the most powerful non-nuclear explosive known, a government source said yesterday on condition of anonymity. The institute has significantly improved explosive and rocket propellant research and development in recent years, the source said. A new factory was established in June 2022 with NT$540 million (US$16.6 million) in equipment installed, the source said. A central complex that would house 50-gallon (189 liters) and 300-gallon (1,136 liters) explosive mixer machines, as well as a storage device, was constructed in the factory, the institute said. The explosive is