Unemployment surged to 8.9 percent in December, with nearly 9.5 million Americans looking for work and more than another million too discouraged to keep looking, the Labor Department reported yesterday.
Many economists say they believe the unemployment rate for January will shatter the post-World War II peak of 9 percent. Analysts expect unemployment to continue rising for some months and to average about 9 percent for the year, the highest annual figure since 1941, after peaking well above that.
President Reagan said he thought the figures were "tragic." But he added he believed his program was the only way to return to job growth. "I don't know any other way to do it," he said.
In the last three months, unemployment has climbed by 1.4 percentage points.
Administration officials say they believe that unemployment will peak at nearly 9 percent and will average less than this for 1982 as a whole.
White House spokesman Larry Speakes said yesterday that "We anticipate that at the end of the second quarter our programs will begin to work and that we will see an upturn in the overall economy."
Democrats immediately blamed the president for the recession and the rising unemployment toll.
"This recession is the Reagan recession," House Speaker Thomas P. (Tip) O'Neill Jr. (D-Mass) said yesterday. "It is a direct result of Reagan tight money and Reagan high interest rates," he added.
The deepening national recession has thrown 2 million people out of work since it began last July, the Labor Department's Bureau of Labor Statistics reported yesterday. Two-thirds of these were adult men, who form the core of the labor force.
In December there was a striking increase of 0.8 percent in the jobless rate for adult men to 8.0 percent, with blue-collar workers particularly hard hit. Their unemployment rate was 12.9 percent, BLS said.
BLS Commissioner Janet Norwood said that it was a "very unusual development" that this rate for men was now 0.5 percent higher than that for women. The difference "stems partly from the fact that women are less likely than men to be employed in the goods-producing sector of the economy, where the sharpest employment reductions occurred," she said.
There were large increases in unemployment last month for full-time workers and those in durable goods manufacturing, Norwood added. The jobless rate for auto workers leaped from 15.8 percent to 21.7 percent in the month.
In the past the administration has said that rising unemployment is the price to be paid for reducing inflation, although Reagan has also promised that his economic program will stimulate the economy. Many economists say they believe that it would take a prolonged period of high unemployment to reduce inflation significantly.
Reagan yesterday denied that high unemployment was necessary to fight inflation and said anyone who suggested that the increase was deliberate "is again inventing something out of whole cloth."
Record high interest rates last summer and fall precipitated the recession, which has spread from the housing and auto industries throughout the rest of the economy.
Although interest rates have fallen sharply from their peaks, they appear to have flattened out. If there are no further drops in the cost of borrowing, the recovery from recession is likely to be very weak, analysts say.
The BLS said there was a rise of 150,000 last month in the number of "discouraged workers" who told government surveyors that they would like to work but have given up looking for a job because the task seems futile.
The 1.2 million total of such workers was the highest since this began to be measured in 1970. People who no longer are actively seeking employment are not counted as unemployed by the government.
Black unemployment reached 17.4 percent last month, another postwar record. Rates among other groups were 7.8 percent for all whites, up from 7.4 percent; 7.5 percent for adult women, from 7.3 percent, and 21.7 percent for all teen-agers, down slightly from 21.8 percent.
All of the 458,000 rise in unemployment in December was accounted for by people who lost their jobs, whether through layoffs or permanently, BLS said. There was a sharp rise in the number of people working part time to a new high of 5.4 million, Norwood said, because their hours were cut back or because they could not find full-time work.
Employment fell last month, for the fourth month running, the BLS report showed. The number of people in work was 97.2 million, down from just over 98 million in November.