Video: Job losses “going to be ugly” in 2009

The fallout from one of the worst holiday sales seasons in decades has begun for retailers.

Wal-Mart, one of the discount giants that had fared well through the weak economy, announced a drop in sales last month as money-conscious consumers cut spending even further, especially on clothing and jewelry.

Department store operator Macy’s incorporated has announced it is closing 11 stores nationwide, and anaylsts say more retailers could follow.

“It’s going to be ugly,“ warned Goldman Sachs retail analyst Adrianne Shapira. “Clearly it’s tough for the strong, well-capitalized retailers so you can imagine whats going on for the weaker players.“

Nearly every sector of the U.S. economy is struggling with cutbacks or layoffs. The number of jobless Americans collecting unemployment hit a 26 year high Thursday.

Michael Bruce lost his job as a contract worker in Tulsa, Oklahoma just before Christmas. He’s still searching for work and answers. “How am I going to provide for my family, food and clothing for my children?“ he asks.

In Atlanta, the Silver Skillet Diner has been serving up breakfast and lunch for more than 50 years, but owner Jeff Brackenridge says the recession is eating away at his profits. Business is off 40 percent.  “I hate to say this, but my wife and I are not paying ourselves just to keep the business afloat,“ he admitted.

4.6 six million people are now on the jobless benefits payroll.  On Friday the government releases its report on non-farm payrolls.

Early estimates show unemployment could climb to seven percent nationwide after a tough December.