WASHINGTON – Payrolls nationwide shrank by 524,000 jobs last month bringing total job losses for the year to 2.6 million, the most since 1945, and the nation’s unemployment rate to a 15-year high of 7.2 percent, the U.S. Department of Labor’s Bureau of Labor Statistics reported today.

December’s decline in non-farm payroll employment was slightly slower than the 525,000-job loss predicted in a Bloomberg News survey of 73 economists. It also was slower than the November decline (READ MORE), which cost the nation a larger-than-previously-estimated 584,000 jobs.

Nonetheless, “the labor market continued to deteriorate in December,” as U.S. payrolls shrank for the 12th month in a row, BLS Commissioner Keith Hall told Congress’ Joint Economic Committee. By comparison, the nation’s payrolls added 1.1 million jobs in 2007.

Moreover, he said, of the 2.6 million non-farm jobs the nation’s payrolls shed in 2008, 1.9 million were lost in the past four months. “Employment dropped in nearly all major industry sectors over this 4-month period,” Hall said.

As “the unemployment rate rose by 0.4 percentage point in December to 7.2 percent, the number of unemployed persons increased by 632,000 to 11.1 million,” he added. Upward revisions based on new data boosted November’s jobless rate to 6.8 percent and October’s to 6.6 percent, the BLS said.

The Bloomberg survey’s median forecast had called for the unemployment rate to hit 7 percent in December, rising 0.3 percentage points from the previous month’s initial estimate of 6.7 percent.

“In 2008, the jobless rate rose by 2.3 percentage points” – an increase of nearly 50 percent from the year-ago unemployment rate of 4.9 percent – “and the number of unemployed increased by 3.6 million,” Hall said, noting that “the rise in unemployment has been widespread across demographic groups.”

Meanwhile, “employment in manufacturing continued to fall over the month, with job losses spread throughout the sector,” the BLS commissioner said. Manufacturing payrolls shrank by 149,000 jobs in December, bringing the sector’s total losses since the recession officially began in December 2007 to 791,000. Last month’s biggest manufacturing-job losses came in the fabricated metals (-28,000 jobs) and motor vehicles and parts (-21,000) industries. “Since the start of the recession,” Hall said, “employment in motor vehicles and parts has fallen by 162,000, or about 17 percent.”

The average work week for private non-supervisory workers shrank by 0.2 hours, to 33.3 hours in December from 33.5 hours the month before. Average manufacturing hours shrank by 0.4 hour to 39.9 per week, while average manufacturing overtime shrank by 0.3 hours to 3 hours per week.

“Construction employment dropped by 101,000 over the month, with declines dispersed throughout the sector,” Hall said. “Since peaking in September 2006, employment has fallen by 899,000.

“In the service-providing sector, temporary-help agencies lost 81,000 jobs in December and 490,000 over the past 12 months,” he continued.

“Employment in retail trade fell by 67,000 over the month. While job losses were widespread among retail industries, about a third of the decline occurred in automobile dealerships. Employment in wholesale trade also contracted over the month (-30,000).

“The only major private industry sector that continued to add a significant number of jobs was health care. Employment in this industry rose by 32,000 over the month and by 372,000 over the past 12 months,” Hall said.

“The measures from the household survey also highlight the deterioration in labor-market conditions,” the BLS chief said.

Along with the national jobless rate, “the number of persons experiencing long spells of unemployment also has risen. About 2.6 million individuals had been unemployed for 27 weeks or more in December, an increase of 384,000 over the month and nearly 1.3 million over the past 12 months,” Hall said.

“The number of persons working part-time who would have

preferred full-time employment also continued to increase in December, rising to 8.0 million. Over the last 12 months, the number of such workers has grown by 3.4 million.”

The BLS survey also found an increase in the number of “persons not in the labor force” – that is, people not currently working or looking for work. “Among this group, about 1.9 million persons in December were classified as marginally attached to the labor force, up from 1.3 million a year earlier,” Hall said. “These individuals wanted a job, were available for work, and had looked for a job sometime in the prior 12 months.”

There was some good news, however, for those who are still working.

Average hourly earnings for private-sector production and non-supervisory workers “rose by 5 cents, or 0.3 percent, in December,” Hall said. “Over the past 12 months, average hourly earnings have increased by 3.7 percent” to $18.36 per hour. That annual increase outpaced the 12-month inflation rate of 0.6 percent, as measured by the change in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) from November 2007 to November 2008 (the most recent month for which such data are available).

Additional information, including the 31-page Employment Situation Summary for December 2008 and the BLS Commissioner’s Statement on the Employment Situation release, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov.