Finance sector may lose 300,000 jobs; steel mills to shut 17 of 29 blast furnaces
(NEW YORK) As the financial crisis crimps demand for US goods and services, the workers who produce them are losing their jobs by the tens of thousands.
Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.
When October’s job losses are announced on Nov 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 per cent is likely to rise, perhaps significantly.
‘My view is that it will be near 8 or 8.5 per cent by the end of next year,’ said Nigel Gault, chief domestic economist at Global Insight, offering a forecast others share. That would be the highest unemployment rate since the deep recession of the early 1980s.
Companies are laying off workers to cut production as consumers, struggling with their own finances, scale back spending. Employers had tried for months to cut expenses through hiring freezes and by cutting back hours. That has turned out not to be enough, and with earnings down sharply in the third quarter, corporate America has turned to layoffs.
‘People have grown very nervous,’ said Harry Holzer, a labour economist at Georgetown University and the Urban Institute. ‘They have seen a lot of their wealth wiped out and as they cut back their spending, companies are responding with layoffs, which hurts consumption even more.’
The layoffs are widespread. For Dwight and Rochelle Stokes of Phenix City, Alabama, the layoffs are a family event. He lost his job two weeks ago as an aviation mechanic at the Pratt & Whitney jet engine facility near his home - a few days after his wife lost hers as a cosmetologist at Great Clips, a family-owned barbershop and beauty salon.
‘It got really slow in July and August,’ Rochelle Stokes said. ‘I would sit there for two hours, and some days we had only 10 clients, four of us for 10 clients.’
The broadening layoffs are most pronounced on Wall Street, in the auto industry, in construction, in the airlines and in retailing. The steel mills, big suppliers to many sectors of the economy, are shutting 17 of the nation’s 29 blast furnaces - a startling indicator of how quickly output is declining.
‘We have seen a softening order book in the most dramatic ways in the last week,’ said Tom Conway, a vice-president of the United Steelworkers of America, adding that layoffs in the industry ‘are just starting now’.
In September alone, 2,269 employers each laid off 50 people or more, the Bureau of Labor Statistics reported, up sharply from the spring and summer months, and the highest number since September 2001.
The financial services industry has been cutting jobs since last summer, when the credit crisis took hold. By some estimates, 300,000 jobs will disappear from banks, mutual fund groups, hedge funds and other financial services companies before the crisis subsides - 35,000 of them in New York.
Goldman Sachs alone, among the best performers on Wall Street, has announced plans to cut 10 per cent of its work force, which stood at 32,594 at the end of last month.
The current unemployment rate, 6.1 per cent - up more than a percentage point since April - is still relatively mild by post-World War II standards. The highest level since the Great Depression, 10.8 per cent, came in November and December of 1982 as the economy was shaking off a severe recession.
The unemployment rate hit 9 per cent during the mid-1970s recession, and 7.8 per cent in the 1990-91 downturn. The next peak, 6.3 per cent, occurred in June 2003, during a long jobless recovery in the aftermath of the 2001 recession. -- NYT
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Corporate America is Slashing Jobs
Finance sector may lose 300,000 jobs; steel mills to shut 17 of 29 blast furnaces
(NEW YORK) As the financial crisis crimps demand for US goods and services, the workers who produce them are losing their jobs by the tens of thousands.
Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.
When October’s job losses are announced on Nov 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 per cent is likely to rise, perhaps significantly.
‘My view is that it will be near 8 or 8.5 per cent by the end of next year,’ said Nigel Gault, chief domestic economist at Global Insight, offering a forecast others share. That would be the highest unemployment rate since the deep recession of the early 1980s.
Companies are laying off workers to cut production as consumers, struggling with their own finances, scale back spending. Employers had tried for months to cut expenses through hiring freezes and by cutting back hours. That has turned out not to be enough, and with earnings down sharply in the third quarter, corporate America has turned to layoffs.
‘People have grown very nervous,’ said Harry Holzer, a labour economist at Georgetown University and the Urban Institute. ‘They have seen a lot of their wealth wiped out and as they cut back their spending, companies are responding with layoffs, which hurts consumption even more.’
The layoffs are widespread. For Dwight and Rochelle Stokes of Phenix City, Alabama, the layoffs are a family event. He lost his job two weeks ago as an aviation mechanic at the Pratt & Whitney jet engine facility near his home - a few days after his wife lost hers as a cosmetologist at Great Clips, a family-owned barbershop and beauty salon.
‘It got really slow in July and August,’ Rochelle Stokes said. ‘I would sit there for two hours, and some days we had only 10 clients, four of us for 10 clients.’
The broadening layoffs are most pronounced on Wall Street, in the auto industry, in construction, in the airlines and in retailing. The steel mills, big suppliers to many sectors of the economy, are shutting 17 of the nation’s 29 blast furnaces - a startling indicator of how quickly output is declining.
‘We have seen a softening order book in the most dramatic ways in the last week,’ said Tom Conway, a vice-president of the United Steelworkers of America, adding that layoffs in the industry ‘are just starting now’.
In September alone, 2,269 employers each laid off 50 people or more, the Bureau of Labor Statistics reported, up sharply from the spring and summer months, and the highest number since September 2001.
The financial services industry has been cutting jobs since last summer, when the credit crisis took hold. By some estimates, 300,000 jobs will disappear from banks, mutual fund groups, hedge funds and other financial services companies before the crisis subsides - 35,000 of them in New York.
Goldman Sachs alone, among the best performers on Wall Street, has announced plans to cut 10 per cent of its work force, which stood at 32,594 at the end of last month.
The current unemployment rate, 6.1 per cent - up more than a percentage point since April - is still relatively mild by post-World War II standards. The highest level since the Great Depression, 10.8 per cent, came in November and December of 1982 as the economy was shaking off a severe recession.
The unemployment rate hit 9 per cent during the mid-1970s recession, and 7.8 per cent in the 1990-91 downturn. The next peak, 6.3 per cent, occurred in June 2003, during a long jobless recovery in the aftermath of the 2001 recession. -- NYT
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