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Latest Economic Indicators Continue Dire News
And, reflecting expectations for a gloomy holiday season, retailers did only about two-thirds as much holiday hiring in November as they would in a normal year. Once adjusted for ordinary seasonal variations, retailers cut 91,000 jobs.
But severe as the damage is for those who sell directly to consumers, economists were most struck by how broad-based the weakness was.
"It still would be ugly even if you added back retail," said Kurt Karl, chief U.S. economist for insurance company Swiss Re. "It's a widespread job cutting exercise that's going on."
While the jobless rate rose only modestly, the details of the report contained worse news for American workers. A broader measure of unemployment that includes people who want a job but are not actively looking and people who are working part time but would prefer a full-time job rose more steeply -- to 12.5 percent of the workforce, from 11.8 percent in October. A year ago, that rate was 8.4 percent.
That suggests that on top of the 10.3 million people who are unemployed, another 9 million Americans are out of work or not getting the hours they want due to the weak economy.
"I'm looking for a silver lining in this report, and I'm not finding it," said Anderson, the Wells Fargo economist.
The broad economic weakness is perhaps most visible in the plummeting price of crude oil, which is down 25 percent since Nov. 28 and had its biggest one-week drop since 1991. Crude oil dropped to just under $41 a barrel yesterday on the New York Mercantile Exchange, down from an intraday peak of $147 in July.
The drop in prices is reordering consumer priorities. The steepest percentage drop in November sales of any major car brand was the fuel-sipping Toyota Prius, down 48 percent from November 2007.
Despite the steep fall in prices, the weak economy has kept U.S. oil consumption below last year's levels, though not as far below as it had fallen in September. U.S. petroleum demand during the four weeks ended Nov. 28 was down 6.2 percent from a year earlier, an Energy Department report said.
"It was a price issue and now it has become an economy issue," said Rob J. Routs, executive director of oil products and chemicals and a member of the board of Royal Dutch Shell.
The drop in prices is providing a boost for consumers and the U.S. economy overall. The cost of importing crude oil and refined products was more than $30 billion lower in November than in July, according to statistics from the Energy Department and the Organization of the Petroleum Exporting Countries. That provides a stimulus to the economy at a critical time, economists said.
Oil exporting countries, however, are watching the falling prices with growing alarm. The president of OPEC, Chakib Khelil, told Algerian television that if prices remain at this level, the group would make "an important reduction" in output at its Dec. 17 meeting.
In a report issued yesterday, the International Energy Agency lowered its forecast for world oil consumption compared with expectations issued in July: 700,000 barrels a day lower in 2008, 1.4 million barrels a day lower in 2009 and 2.9 million barrels a day lower in 2013.
"The global market has been turned upside down since the summer by the impact of earlier high prices, an economic slowdown and resultant plunge in crude prices, and by an evolving credit crisis," a new IEA report said.