Two labor reports issued yesterday showed that private employers cut payrolls at a faster pace in December, threatening to send the unemployment rate to levels unseen in a quarter-century.

"The level of unemployment is going to be higher" and may exceed 10 percent, Martin Feldstein, the former National Bureau of Economic Research president and Harvard University professor, said in an interview. "It's really bad, and it needs a fix," he said before appearing at a hearing on a fiscal-stimulus plan with House lawmakers in Washington.

The national unemployment rate in November was 6.7 percent, up from 5.0 percent in December 2007. The rate for last month is to be released tomorrow.

One of yesterday's reports, by ADP Employer Services, of Roseland, N.J., found that private-sector employment fell an estimated 693,000 in December, the most since the payroll-processing firm began its survey in 2001. The report is based on payroll data.

Separately, Challenger, Gray & Christmas Inc. said layoffs announced by U.S. employers totaled 166,348 in December, 275 percent more than in December 2007.

Last month's cuts were the largest since the Challenger Gray survey began in 1989. But they were down about 14,000 from November.

In his testimony, Feldstein, a White House economic aide in the Reagan administration, endorsed the $775 billion fiscal stimulus planned by the incoming administration of President-elect Barack Obama, which aims to save or create three million jobs.

"We are facing a crisis in our economy, one that requires immediate and decisive action to spur the creation of new jobs," Obama said at a news conference in Washington.

The drop in the ADP gauge of total employment was larger than the median estimate of a 495,000 decline in a Bloomberg News survey of 24 economists.

Meanwhile, in the Philadelphia region, unemployment rose to 5.9 percent in November, up from 4 percent in November 2007, according to the U.S. Labor Department, which published its November metropolitan statistics Tuesday.

The number of unemployed people in the Philadelphia metropolitan area, which includes the suburbs, nearby South Jersey counties, and parts of Delaware and Maryland, rose to 176,300, up 57,000 in a year and up 6,600 in a month.

Joel Prakken, chairman of Macroeconomic Advisers L.L.C., said in a conference call that about two million more jobs will be lost nationwide in 2009, for a total of more than four million in the recession that began in December 2007.

"In the last several months, the job losses have spread very aggressively into the services economy," he said.

Cutting Back

Layoffs announced by U.S. companies.

Year Job cuts

1999 675,132

2000 613,960

2001 1,956,876

2002 1,466,823

2003 1,236,426

2004 1,039,735

2005 1,072,054

2006 839,822

2007 768,264

2008 1,223,993

Largest 2008 Cuts

By industry

Financial 260,110

Automotive 127,281

Transportation 82,859

Retail 81,621

SOURCE: Challenger, Gray & Christmas Inc.