Employment Report: Bad, Really Bad

The US lost 524,000 in December, roughly in line consensus estimates, but the jobless rate rose more than forecast to 7.2%.  The service sector suffered the brunt of the losses (banks, insurance companies, restaurants and retailers) posting a decline of 273,000 workers, after a decline of 402,000 the previous month.  Additionally, the average work week shrank to a record-low 33.3 hours from 33.5 hours.  Average weekly hours worked by production workers dropped to 39.9 hours from 40.3 hours, while overtime decreased to 3 hours from 3.3 hours.  Average weekly earnings declined by $2 to $611.39.

The market is shrugging its shoulders as if to say "ho hum, we knew it would be bad."  But really, this is awful.  A 7.2% unemployment rate is downright miserable.  Furthermore, according to a friend of the blog with a better grasp on economics than myself, the decline in the average work week represents another half a million jobs lost in the economy.  Although the employment report can be written off as "anticipated," often it just takes some time for the bad news to sink in.