MercoPress. South Atlantic News Agency

US jobless rate rises to 15-year high, and worsening

The US economy lost 533,000 jobs in November, the biggest monthly cut since 1974, the US Labour Department said on Friday. In a dramatic indication of the worsening economic situation, the US jobless rate rose to a 15-year high of 6.7% from 6.5% in October.

Recent figures have fuelled fears that the world's biggest economy is set for a deep, long downturn. The news pushed Wall Street share prices down 2.5% at one stage, but the market then rebounded and eventually closed up 3%. US oil prices fell to a four-year low, before recovering slightly to close down 1.93 at 41.74 USD a barrel. Four days after the government officially stated that the US economy was in a recession, President George W Bush himself publicly acknowledged the fact. Speaking at the White House, Mr Bush said: "Our economy is in a recession. This is in large part because of severe problems in our housing, credit and financial markets." Reacting to the unemployment data, US President-elect Barack Obama said: "There are no quick or easy fixes to this crisis, which has been many years in the making, and it's likely to get worse before it gets better." Commentators said the jobs figures showed clearly how steeply the US economy was declining. "This was much worse than was expected and represents wholesale capitulation. The threat of a widespread depression is now real and present," said Peter Morici, a professor at the University of Maryland School of Business. The National Bureau of Economic Research said this week that the US entered a recession in December 2007. Separately, a measure of US service sector activity, the Institute for Supply Management's index, dropped to a record low in November. The US service sector makes up about 80% of US economic activity. November was the 11th month in a row that the economy lost jobs. The economy contracted at an annual rate of 0.5% from July to September due to the biggest fall in US consumer spending in 28 years. Many economists believe the gross domestic product will fall even more sharply in the current quarter. On Wednesday, the Federal Reserve Board painted a bleak picture of the US economy in its influential Beige Book, a report used to help determine US interest rates. It said economic activity has weakened across the US in the past two months, with retail sales, and vehicle sales in particular, "down significantly".