These will be decidedly unhappy holidays for hundreds of thousands of workers who won't have jobs thanks to the steep economic downturn and the financial crisis.
At a time when the economy usually creates about 300,000 jobs during the November-December holiday span, economists predict it likely will lose about twice that, creating a void of about 1 million fewer jobs this year.
The pain from such a yuletide contraction will be felt far and wide. Friday's jobs number will provide the first indication of how bad things are so far, but not about how bad they'll get.
"There's a newfound urgency on the part of companies to get their financial houses in order so that they can brace themselves for what lies ahead in the weak global economy and then be in a position to respond to it swiftly with a leaner, meaner work force," says David Ressler, chief economist at Nomura Securities in New York.
"That's going to be one of the many factors holding back consumer spending during the holidays," he adds. "It's definitely going to be a tough Christmas for a lot of people."
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Analysts expect the retail and manufacturing industries to get hit hardest—in general, anything consumer-related—with health care and educational services to be largely spared.
The worst of the layoffs will occur in the coming three or four months, with the consensus for a let-up happening around the end of the second quarter in 2009.
But until then—and especially during the holiday season, which retailers rely on for their lifeblood—the onslaught of job cuts will be brutal, with even the temporary workers that stores hire affected.
"For individual households it's devastating and it's painful and it's just about every horrible adjective you can attach to it, " Ressler says. "But it does come to an end. When it does, the economy will start to improve, people will start getting their lives back in order."
Cleaning Up Balance Sheets
Job losses always have had a ripple effect through the economy. But during a time when retail sales are so weak and housing continues to struggle, the unemployment numbers will be felt especially hard.
The monthly jobless claims report—November's is due Friday and will be closely watched—is only a lagging indicator of what happened in the previous month.
What's scarier, then, is what lies ahead, and December's number will provide even more gloom. AT&T unveiled plans Thursday to cut 12,000 workers starting immediately, while DuPont will lay off 2,500 and Credit Suisse will slash 5,300from its payrolls.
"What happens is it feeds on itself," says Quincy Krosby, chief investment strategist at The Hartford. "Businesses will watch what their competitors are doing, particularly in an environment where you're not seeing much demand. You don't want your competitors to have an advantage, and part of that is your competitor is cutting costs. Chances are it will lead to more cuts on your balance sheet."
"You look at the retailers dealing with razor-thin margins, probably at the stage where they just want to clear inventory—hardly a scenario for hiring," she adds.
With investors clamoring for tighter bottom lines, companies will be under intense pressure to clean house before closing the books on 2008, with layoffs carrying over by some estimates through much of 2010
"It's a real shame but that's the way things work these days. It takes a long time to get back to profitability, particularly when we have pretty modest economic recoveries," says Kurt Karl, chief US economist at Swiss Re. "You hope it's not going to happen before the holidays, but businesses have to do what they have to do."
Blue Christmas for Investors?
As far as putting money to work in the stock market, the layoff climate makes things dicey for investors--on one hand the layoffs will help with profitability but on the other they reduce consumers' ability to shop and buy homes.
At the same time, the market will have to deal with the continuing problems of the auto industry and the specter of a massive federal bailout or one of the big companies falling into bankruptcy.
A congressional bailout package for Detroit will be only a "postponement package," Krosby says, to soften the blow to the economy of the massive job losses that would be associated with the collapse of either General Motors , Ford or Chrysler.
"If the economy had been growing at, say, three and a half or 4 percent and one of the companies had these problems, we'd probably be involved in a planned bankruptcy," she says. "At this point we are postponing that because the economy cannot handle the unintended consequences of a major hit to one in 10 jobs in the US economy."
Video: CNBC's experts analyze the Thursday job numbers
So while the Big Three may escape more job cuts before the end of the year, others won't be so lucky.
"This is not going to be mild," Karl says. "It's going to be severe, more like 1974, '75 and into the '82 period."
Both employment numbers and the stock market probably will lead the way out of the worst of the recession in the second quarter, Karl adds.
Investors will be watching President-elect Barack Obama for specific indications of how his administration plans to handle the economic crisis. There's some concern over whether he plans to follow through on campaign promises to hit higher wage earners with tax increases, which some economists say will be detrimental to a recovery.
"There are a lot of question marks. This seems to be an administration that wants this economy to be picking up as quickly as possible, wants jobs, and the only way you're going to do that is to try to get the economy started on all cylinders," Krosby says. "The tax hikes at this point would be a serious mistake."
The Obama administration's plans for the economy will be especially important to the hundreds of thousands who will lose their jobs during the holiday season.
"We've seen the tip of the iceberg and we're now looking into the dark waters below and seeing it's a pretty big iceberg," Nomura's Ressler says. "I think we're going to see many more months of job losses, probably running up to a few million more."