Job losses accelerate in the last quarter of 2008.  The economy shed 524,000 jobs in December marking the 12th straight monthly decline, according to the Bureau of Labor Statistics (BLS).  Over the past three months, the economy has lost an average of 510,000 jobs per month, compared to an average loss of 118,000 per month from January to September. Indeed, the downward trend for job growth tracks the decline in consumer confidence, with a particularly sharp fall in confidence mirroring the accelerated job losses of the last quarter. (See Chart)  The unemployment rate jumped to 7.2 percent in December and is now at its highest level since June 1986. Overall, the unemployment rate has increased 2.3 percentage points since the start of the current recession in December 2007.  Although the unemployment rate for men has risen faster than for women, women’s employment is threatened in this recession, especially given recent declines in retail sales and the financial deficits facing state and local governments. 

Number of long-term unemployed rises.  The number of individuals who have been unemployed for 27 weeks or more rose by 384,000 in December, and has risen by nearly 1.3 million since the start of the recession. Additionally, the BLS reported that the underemployment rate rose to 13.5 percent, further evidence that workers are having trouble finding jobs in the current labor market.  The underemployment rate is a broad measure of the health of the labor market and accounts for discouraged workers who have left the labor force as well as workers who are involuntarily working part-time.  A recent analysis by top economic advisors from the incoming administration shows that the proposed stimulus will target the underemployed, moving 2.7 million involuntarily part-time employees to full-time employment.  On a related note, the BLS reported that the employment-to-population ratio fell to 61.0 in December, the lowest since January 1987.

U.S. auto and truck sales remain depressed in December.  Auto and truck sales increased by 22.5 percent in December after collapsing in November, but remain down nearly 34 percent from December 2007.  Both domestic and imported autos and trucks saw their sales increase.  Overall, 2008 was a difficult year for the automobile industry with sales down in every category — from cars to SUVs, domestics to imports.  While the sales of SUVs and trucks collapsed during the spring and summer of 2008 due to the explosion in the price of gasoline, the sales of smaller fuel-efficient cars were on the way up.  With the decline in overall consumer spending, auto sales in small and fuel-efficient cars are also falling.  Since the start of the recession, automobile and parts employment has fallen by 162,000 or 17 percent.