Record numbers of homeowners are falling behind on mortgage payments and the U.S. economy is losing jobs at an alarming rate with companies big and small slashing their work force.
A half-million American jobs disappeared month, the worst mass layoffs in more than three decades, as the nation spiraled downward in what could be the hardest hard times since the Great Depression.
Bush administration officials said Friday night that the White House is considering telling Congress as early as next week that it wants to tap the unused $350 billion of the financial industry bailout. It was not immediately clear how the administration might use the money.
General Motors, one of the Big Three automakers that went to Congress this week for a second time with hat in hand, announced it was cutting even more jobs.
"The economy is in a free fall," said Richard Yamarone of Argus Research. "It is as if someone flicked off the switch on hiring."
Despite the gloom, investors found a silver lining, betting that so much bad news would force fresh government action to revive the foundering economy. The Dow Jones industrial rose 259 points.
But economists, staring at 533,000 lost jobs, were anything but hopeful. Since the start of the recession last December, the economy has shed 1.9 million jobs, and the number of unemployed people has increased by 2.7 million — to 10.3 million now out of work.
Some analysts predict 3 million more jobs will be lost between now and the spring of 2010 — and that the once-humming U.S. economy could stagger backward at a shocking 6 percent rate for the current three-month quarter.
"It’s a mess," said Mark Zandi, chief economist at Moody’s Economy.com. "Businesses, battening down the hatches, are concerned about their survival and are cutting workers."
President-elect Barack Obama said the crisis "is likely to get worse before it gets better," and no one was going to argue that point. Economists predicted the unemployment rate, which rose to a 15-year high of 6.7 percent in November, could soar as high as 10 percent before skittish employers begin hiring again.
The jobless rate would have bolted to 7 percent for the month if not for the exodus of 422,000 people from the work force for any number of reasons — going back to school, retiring or simply abandoning job searches out of frustration. When people stop looking, they’re no longer counted in the unemployment rate.
The rate was at 4.7 percent just one year ago, 6.5 percent in October.
Employment shrank in virtually every part of the economy — factories, construction companies, financial firms, accounting and bookkeeping, architectural and engineering firms, hotels and motels, food services, retailers, temporary help, transportation, publishing, janitorial and building maintenance, and even waste management. The few fields spared included education, health care and government.
The United States — already in recession for a year, may not be out of it until the spring of 2010 — making for the longest downturn since the Great Depression of the 1930s, economists are now saying. Recessions in the mid-1970s and early 1980s last 16 months.
Unemployment peaked at 10.8 percent in 1982, terrible but still a far cry from the Depression, when roughly one in four Americans were out of work.
That said, more pain is certainly in store. Fresh evidence:
• A record one in 10 American homeowners with a mortgage was either at least a month behind on payments or in foreclosure at the end of September, the Mortgage Bankers Association reported.
• General Motors, already pleading with Congress for billions of dollars to survive the month, said it would lay off an additional 2,000 workers as it cuts shifts at three car factories starting in February due to slowing demand for GM cars.
President George W. Bush, who used the word "recession" for the first time to describe the economy’s state, pledged Friday to explore more efforts to ease housing, credit and financial stresses.
"There is still more work to do," Bush said. "My administration is committed to ensuring that our economy succeeds."
President-elect Obama said the dismal job news underscored the need for forceful action, even as he warned that the pain could not be quickly relieved.
Employers are slashing costs as they cope with sagging sales in the U.S. and in other countries, which are struggling with their own economic troubles.
In recent days, AT&T Inc., DuPont, JPMorgan Chase & Co., as well as jet engine maker Pratt & Whitney, a subsidiary of United Technologies Corp., and mining company Freeport-McMoRan Copper & Gold Inc. all have announced layoffs.
Tom Solso, chief executive of Columbus, Ind.-based manufacturer Cummins Inc., said Friday the company planned to cut 500 jobs, or about 3.5 percent of its work force despite other cost-cutting moves such as temporarily shutting down plants, shortening work weeks and extending holiday shutdowns.
Fighting for survival, the chiefs of Chrysler LLC, General Motors Corp. and Ford Motor Co. returned to Capitol Hill Friday to again ask lawmakers for as much as $34 billion in emergency aid.
Workers with jobs did see modest wage gains in November. Average hourly earnings rose to $18.30, a 0.4 percent increase from the previous month. Over the year, wages have grown 3.7 percent, but paychecks haven’t stretched that far because of high prices for energy, food and other items.
Federal Reserve Chairman Ben Bernanke is now expected ratchet down a key interest rate — near a historic low of 1 percent — by at least a half-percentage point on Dec. 16 in a bid to breathe life into the moribund economy. Bernanke is exploring other economic revival options and wants the government to step up efforts to curb home foreclosures.
Treasury Secretary Henry Paulson, whose department oversees the $700 billion financial bailout program, also is weighing new initiatives.
Obama, who takes office on Jan. 20, has called for a massive economic recovery bill to generate 2.5 million jobs over his first two years in office. House Speaker Nancy Pelosi, D-Calif., has vowed to have a package ready on Inauguration Day for Obama’s signature.
The measure, which could total $500 billion, would bankroll big public works projects to create jobs, provide aid to states to help with Medicaid costs, and provide money toward renewable energy development.