Hold on to Your Hats -- More Bad News on Jobs

It's getting grim out there. The U.S. Department of Labor reported today that the economy shed 240,000 jobs in October, the 10th consecutive monthly decline. The Labor Department also revised its previously reported numbers of job losses for the third quarter – August and September job losses jumped from 73,000 to 127,000 and 159,000 to 284,000, respectively. The unemployment rate is now 6.5%, its highest level since 1994. Employment fell 1.2 million in the first 10 months of 2008; over half of the decrease occurred in the past three months. The New York Times reports that many economists now expect unemployment to reach 8% by the middle of 2009, a level not seen in 25 years. Wages remain stagnant -- workers in non-managerial positions saw their weekly wages rise by just 2.9% from October 2007, well below the rate of inflation.

At the center of the storm are plunging housing prices, tightening credit, sickly consumer spending, and shrinking paychecks. A second stimulus package is a good first step in addressing the failing fundamentals of our economy. For now, hold on to your hats.