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Futures Tumble After Huge Job Loss

Stocks fell sharply Friday after the biggest monthly job loss in 34 years.

Employers cut 533,000 jobs from nonfarm payrollsin November, the sharpest job loss since December 1974 and much more than the 340,000 decline economists had expected. The unemployment rate rose to 6.7 percent from 6.5 percent.

The prior two months' job losses were revise to show that a total of 199,000 more jobs were lost than previously thought in September and October. That means 1.25 million jobs were lost in the last three months alone, bringing the total to nearly 2 million since the start of the year.

But unemployment is a lagging indicator, telling investors what has been more than what lies ahead.

"As much as the market pays attention to this for confirmation of where things are, it doesn't tell you that much about the future," Lakshman Achuthan, of the Economic Cycle Research Institute, said on CNBC. "You have to look at forward-looking data which unfortunately is falling off a cliff."

"The bottom drops out of the labor market," Joshua Shapiro, chief U.S. economist at MFR Inc., said in a research note. "Moreover, history tell that once the labor market weakens as much as it has in the past several months, job-shedding takes on a life of its own and tends to persist for a long while. We expect labor market conditions to be dreadful for many months to come and consequently for consumer spending to continue to decline."

Adding to the gloomy employment outlook, the fate of the Big Three US auto-makers continued to hang in the balance. The CEOs of Ford, General Motors and Chrysler headed back to Capitol Hill to try and avert bankruptcy for the troubled companies.

GM and Chrysler said they would be open to consolidation as a condition of getting the government funds.

Meanwhile, customers of Boeing's 787 Dreamliner faced more delays as the plane-maker is expected to announce another setback to its latest addition, on the back of lengthy strikes and production problems.

Assistant Secretary Neel Kashkari is taking to the stage in Washington at 8 am to talk about the financial markets and the TARP. The Mortgage Bankers Association will also release their quarterly delinquency report. And October consumer credit numbers are out at 3 pm.

On the earnings front, department-store chain Big Lots will be releasing results before the bell.