Coming Week: Short on Cheer

A reeling job market, a freshly minted recession and a dampened holiday shopping season will be on investors' minds next week, as 2008 speeds toward its conclusion.

Investors and U.S. workers likely will not be sad to see the year end. The Labor Department on Friday reported a 533,000 drop in nonfarm payrolls in November, the 11th straight month of declines and the worst single-month decrease in 34 years.

Meanwhile, the economy officially entered a recession a year ago, the National Bureau of Economic Research -- the official arbiter of such things -- declared Monday. And things aren't looking up. The Commerce Department's November retail sales report is due Friday, headlining an ugly week for economic data. Economists are expecting a 1.4% drop in sales as investors begin to try to get a bead on how Christmas shopping is shaping up.

"The consumer is 70% of [gross domestic product]," says Bob Andres, chief investment strategist for Portfolio Management Consultants, the investment arm of Envestnet. "GDP impacts corporate earnings. If the consumer doesn't have a job or is fearful of losing a job, the consumer is not going to spend."

The November nonfarm payrolls decline was far worse than the 335,000 lost jobs expected by economists. The Labor Department also adjusted its job-loss number for October downward to 320,000, from 240,000.

Major employers like AT&T (T Quote) and DuPont (DD Quote) announced thousands of layoffs last week, while bludgeoned banks such as Bank of America (BAC Quote) and JPMorgan Chase (JPM Quote) planned cuts in connection with recent acquisitions.