U.S. bleeds jobs as markets hope for more stimulus

By Steven C. Johnson

NEW YORK (Reuters) - The United States haemorrhaged more than half a million jobs in November, data showed on Friday, and Germany became the latest country to approve an emergency stimulus package as the global economy slipped deeper into crisis.

European stocks tumbled and the price of oil fell sharply. But Wall Street staged a late rally on hopes that the grim data would force Washington into new measures to help the economy.

U.S. employers axed 533,000 jobs last month, the most since 1974 and nearly 200,000 more than economists expected. The unemployment rate hit 6.7 percent, the highest since 1993.

Neighbouring Canada also absorbed more job losses last month than at any time since 1982.

"These are horrendous numbers ... This is an economy that is in absolute free-fall right now. Confidence has collapsed," said Nigel Gault, chief U.S. economist at Global Insight.

The scale of the U.S. recession was underscored by data showing consumer borrowing for items such as cars unexpectedly fell by an annualized 1.5 percent in October. It was only the second monthly decline in over a decade.

With many developed countries either in recession or heading there, central banks have cut interest rates close to the bone and attention is now starting to focus on what happens if they get to zero.

The U.S. Federal Reserve will halve its benchmark interest rates to a record low this month of 0.50 percent, 12 of 16 economists polled by Reuters said. The others saw bigger cuts including one who predicted a rate of zero.