"Spending stalls, and businesses slash US jobs; Unemployment expected to rise above 6 percent" by Louis Uchitelle, New York Times News Service | October 26, 2008
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:
When October's job losses are announced Nov. 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 percent is likely to rise, perhaps significantly. "My view is that it will be near 8 or 8.5 percent 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.
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 as corporate America struggles to adjust to the spreading crisis.
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 percent of its workforce.
Yeah, yeah, poor Goldmans!
To read the Stokes' story, go here, readers!
