WASHINGTON — With jobs disappearing in numbers not seen since the end of World War II, pressure mounted on Congress and President-elect Barack Obama on Friday to overcome their differences and reach agreement on a massive recovery program to stave off economic catastrophe.
The nation's unemployment rate rose to an eye-popping 7.2% in December and brought the total jobs lost for the year to the largest number since 1945, the Labor Department said. More alarming than the bare numbers was the trend line: The economy has lost 2.6 million jobs in the last 12 months, but 75% of them vanished in the last four months, with 524,000 jobs lost in December alone.
Economists expect the employment picture to deteriorate further in the months ahead.
"No one is expecting it to turn around any time soon," said Harry Holzer, a labor economist with Georgetown University and the Urban Institute. "The labor market lags behind the rest of the economy. Absent any signs of stabilization, we can expect this to continue for some time."
Obama moved quickly to tell Democrats and Republicans alike that he was willing to compromise and make adjustments in his proposed $775-billion stimulus package. But he warned that ideological differences must not stand in the way of quick action.
"There are going to be a whole host of good ideas out there, and we welcome all of them," Obama told reporters in a news conference at the end of a week of relentless messaging on the need for a swift economic rescue package. "We're going to sift through all of them and we are going to work in a collaborative fashion with Congress."
"What we can't do is drag this out," he declared.
Economists said the economic crisis that is driving down employment has several parts. For one thing, ordinary Americans have cut back sharply on spending in the last few months as they have watched the value of their homes and investments decline. Meanwhile, businesses, sensing lower demand, are trimming hours and payrolls to conserve their resources. Moreover, economists say that fear is fueling a vicious cycle, with preemptive action taken by companies and consumers in anticipation of further bad news, which in turn helps assure that the future news will be bad.
"The reason why employers are letting people go is not the traditional reason that employees are costing more than they are bringing in," said Lee Ohanian, an economist at UCLA.
