The Wonk Room

Unemployment Hits 14-Year High, U.S. Economy Has Shed 1.2 Million Jobs In 2008

According to data released today by the Department of Labor, the U.S. unemployment rate is at a 14-year high of 6.5 percent. In October, “employers shed another 240,000 jobs…the 10th consecutive monthly decline and a clear signal that an accelerating slowdown is assailing households and businesses.”

The job loss was even worse than economists had predicted. In total, the U.S. economy has seen 1.2 million jobs disappear this year.

As the Center for American Progress’ Christian Weller wrote, “The deepening labor market contraction that followed years of slow job growth requires both a short-term response to keep job losses from spiraling downward and a long-term policy response that will allow American families to recover their income losses.”

Here are some steps that can be taken:

- Extend unemployment benefits, as “many are running out.” CAP’s Michael Ettlinger noted that “the best stimulus proposals can meet the overlapping objectives of boosting demand, stopping job losses, helping those most in need during bad times, and starting to make investments that have long-term benefits. Extending unemployment compensation and measures getting cash into the pockets of people who need it (and will spend it) are examples of stimulus policies.”

- Implement a green recovery and infrastructure investment program, which – by making a wide range of investments that efficiently produce jobs and move the country toward a low-carbon economy – can “create 2 million new jobs nationwide over two years.”

Either of these measures can be included in an economic stimulus package, which is needed to boost the struggling economy anyway. An extension of unemployment benefits has already gained the support of Rep. Nancy Pelosi (D-CA) and President-elect Barack Obama.