Job losses hit 2.4 million-more pain ahead

WASHINGTON - Americans probably suffered a net loss of 2.4 million jobs last year, with the pain likely to stretch well into 2009 and possibly beyond, underscoring the recession's toll on employers and workers and the difficulty President-elect Barack Obama will face in reviving the economy.

Already the New Year has gotten off to a rough start, and more bad news is expected this week when the government releases data on weekly jobless claims and December unemployment.

Just days into 2009, managed care provider Cigna Corp., aluminum producer Alcoa Inc. and computer products designer Logitech International were among those announcing big layoffs as companies scramble to cut costs even deeper. The flurry of layoffs suggest the employment picture will remain grim this year.

"Many companies have a bare-bones mentality. With labor being their biggest expense, you will see them continue to drop the ax on jobs," said Richard Yamarone, economist at Argus Research. "There is absolutely no reason to believe the economy is going to be creating jobs any time soon. There are just no reasons for companies to flick on the hiring switch."

A barometer on layoffs due out Thursday is expected to show that the number of newly laid off people signing up for state unemployment insurance last week rose to 540,000, up from 492,000 in the previous week, according to economists' projections.

The number of people continuing to draw jobless benefit is projected to stay near 4.5 million, demonstrating the troubles the unemployed are having in finding new jobs.

Electronic unemployment filing systems have crashed in at least three states in recent days amid a crush of newly jobless Americans seeking benefits.

For all of 2008, employers likely slashed payrolls by at least 2.4 million. That's based on economists' forecasts for a net loss of 500,000 additional jobs in December, as well as the job losses already reported every month last year by the government. Some, however, think the number of jobs cut last month will be higher - around 600,000 or 700,000. The Labor Department will release that report Friday.

"We await Friday with trepidation," said Ian Shepherdson, chief U.S. economist at High Frequency Economics.

If the conservative, 2.4 million estimate of payroll reductions for 2008 proves correct, it would mark the first annual job loss since the previous recession in 2001. It also would be the worst year of job losses since 1945, when employers slashed nearly 2.8 million jobs. Though the number of jobs in the United States has more than tripled since then, job losses of that magnitude would be sober testimony to the nation's economic woes.

With employers throttling back hiring, the unemployment rate is expected to jump from 6.7 percent in November to 7 percent in December, which would be the highest in 15 1/2 years. That figure also will be released Friday.

Vanishing jobs, tanking home values and shriveled investments have forced consumers to cut back sharply on their spending. In turn, businesses have retrenched as well.