Employers cut 524,000 jobs: The nation’s unemployment rate bolted to 7.2% in December, the highest level in 16 years, as nervous employers slashed 524,000 jobs, capping one of the worst years in modern history for American workers. The Labor Department’s report, released today, underscored the grim toll the deepening recession is having on workers and companies. Not only are employers slashing jobs, they also are cutting workers’ hours and forcing some into part-time work. The average work week in December fell to 33.3 hours, the lowest level on records dating to 1964—and a sign of more job reductions in the months ahead, economists said. All told, 11.1 million people were unemployed in December. For all of 2008, the economy lost a net total of 2.6 million jobs.
Criticism of bailout’s current course: President-elect Barack Obama’s economic team is broadening the mission of the $700 billion bailout for the financial sector, aiming to unfreeze credit for homeowners, consumers, small businesses and local governments. The overhaul is aimed at the $350 billion remaining in the Troubled Asset Relief Program and comes amid mounting criticism from lawmakers and watchdogs that the Bush administration has administered the money in an inconsistent way and has not made banks accountable for the money. The head of a congressional panel overseeing the $700 billion bailout program said Friday that lawmakers need to “take a very hard look” at how banks have used the money and she welcomed Obama’s attempts to better define the program’s mission.
Tax break for job creation criticized: Lawmakers are under orders to finish action on President-elect Barack Obama’s nearly $800 billion economic recovery plan by mid-February. But already it is plain that a set of serious fissures need to be bridged if the bill is to be completed within five weeks. Democrats such as Budget Committee Chairman Kent Conrad complained openly that many of the incoming administration’s proposed tax cuts wouldn’t work. Republicans warned against excessive new spending, with both parties signaling the incoming president they intend to place their own stamp on the economic recovery effort. A call for a $3,000 tax break for job creation drew particular criticism in a closed-door meeting, and numerous lawmakers said Obama had not ticketed enough of his tax proposal for energy.