One of the principal reasons consumer confidence is at an all-time low is fear of job loss, economists say.
U.S. Department of Labor figures show unemployment surged to 7.2 percent in December — a month in which 524,000 jobs were lost. Since the start of the recession in December 2007, the number of unemployed people has grown by 3.6 million to a total of 11.1 million. Employment in the last four months of 2008 alone fell by 1.9 million.
Job-loss increases seem likely to continue, warns the Conference Board, which says its Employment Trends Index fell 16 percent in the past year.
“During 2008, total non-farm employment declined by more than 2.5 million, and the sharp declines in the Employment Trends Index suggest that in 2009 this number could grow by another 2 million,” says Conference Board senior economist Gad Levanon.
The December unemployment rate of 7.2 percent is the highest in 16 years. In 1992, the rate averaged 7.5 percent.
The accompanying chart shows the average unemployment rate for the years between 1970 and 2008.
The rate was high through most of the 1980s, peaking at 9.7 percent in 1982 and 9.6 percent in 1983. The previous high came in 1975, when the rate jumped to 8.5 percent.
This article originally appeared in the February 2009 issue.