Estimates of job losses last month surge
You might want to brace yourself for bad news Friday morning, when the Labor Department is due to release employment data for November.
A survey of economists shows that they on average estimate that payrolls shrank by 330,000 workers last month, Bloomberg News reported today. That would follow declines of 240,000 jobs in October and 284,000 in September.
And some economists believe the job report Friday could be much worse, making for a tough day in the stock market.
Based on recent reports on unemployment claims and service-sector activity, November’s job losses could have exceeded 500,000, Michael Darda at brokerage MKM Partners warned in a report today.
The consensus figure of 330,000 “may be far too optimistic,” Darda wrote. “The worst may be yet to come for the labor market.”
Indeed, layoff estimates have been rising as the economic picture has darkened in the last few weeks. Bloomberg’s consensus figure was 300,000 on Nov. 21 but had climbed to 325,000 by this morning. It rose a further 5,000 as the day progressed.
Even if the worst-case predictions don’t materialize, the employment outlook is plenty ugly.
The unemployment rate is expected to rise to 6.8% from 6.5% in October and 4.7% a year ago. That would mark the biggest one-year jump since 1982, according to Moody’s.
Unemployment peaked on average at 8.2% in the eight recessions dating back to the early 1950s, according to Darda.
-- Walter Hamilton