Automakers may get $15B
Stunned by the job report, Congress and the White House neared agreement on a $15-billion bailout for the Big Three on Friday, the second day their CEOs pressed their plea for more than twice that amount. GM and Chrysler would get immediate cash from a fund previously set aside for fuel-efficient cars. 14A
Economists are at odds over the depth of the recession but they agree on this: It's deeper than they thought a week ago. And it's likely to pick up steam through the first quarter of next year, which would turn it into the longest recession since the Great Depression.
On Friday, the Labor Department reported that employers shed a worse-than-expected 533,000 jobs in November, the most in 34 years. That pushed the national unemployment rate from 6.5 percent to 6.7 percent, and it's expected to climb toward 8.5 percent next year. As more workers grow concerned about keeping their jobs, here's a status report on the latest barrage of economic news.
The loss of a half-million payroll jobs last month was much deeper than the 320,000 job cuts economists were forecasting. The 6.7 percent unemployment rate would have been higher, but for the estimated 422,000 "discouraged" people who pulled out of their job search or those whose unemployment benefits have run out. Losses in recent months also turned out to be worse than previously reported. October's loss was revised to show a cut of 320,000 instead of the originally reported 240,000 loss, while September's drop was revised to 403,000 from 284,000.
And we haven't hit the trough. The first week in December was particularly brutal, with corporate layoffs from companies like AT&T and DuPont. A Business Roundtable survey indicates 60 percent of CEOs plan to cut workers over the next six months, up from 32 percent in the previous quarterly survey. Florida's unemployment numbers for November come out in two weeks.
A whopping 7.3 percent of all Florida home loans were in foreclosure as of the end of September, by far the highest rate in the country, the Mortgage Bankers Association said. Nationally, a record 1 in 10 American homeowners were either at least a month behind on their payments or in foreclosure proceedings. That's up from 9.2 percent in the April-June quarter and 7.3 percent a year earlier.
But the pain may be stabilizing: The number of loans that entered the foreclosure process totaled 1.07 percent of all loans in the third quarter, which is flat from the second quarter.
Friday epitomized what has become a typical case of paradoxical and wildly gyrating stock markets. The Dow Jones Industrial Average initially fell 275 points on the jobs data before swinging to a 259-point gain on expectations that a worse-than-expected economic snapshot will translate into more federal intervention.
One megadeal born out of the financial crisis moved closer to fruition. Shareholders of Merrill Lynch & Co. on Friday approved the sale of the troubled investment bank to Bank of America. The deal is creating the country's largest financial services firm, with BofA surpassing JPMorgan Chase and Citigroup with $2.7-trillion in assets.
The ugly jobs report puts more pressure on the Federal Reserve to find ways to stimulate lending. It's expected to slash its benchmark federal funds rate aggressively this month, from 1 percent to 0.50 percent or even 0.25 percent.
Oil prices plummeted to four-year lows of $40.40 a barrel, triggering more speculation that $1 gas is on the horizon. Oil prices have fallen more than 70 percent since peaking at $147.27 a barrel in July. As of Friday, it cost $1.77 on average for regular unleaded, down 57 cents over the past month, according to AAA. Tom Kloza, publisher and chief oil analyst at Oil Price Information Service, blogged that retail prices soon could fetch $1.25 a gallon in parts of the Midwest.
Information from Times wires was used in this report. Jeff Harrington can be reached at firstname.lastname@example.org or (727) 893-8242.