I’ll start with a report from a couple days ago from CNN. Monthly job losses cut across 41 states:
Private sector and government jobs fell in 41 states and the District of Columbia last month, the Labor Department said. By comparison, only 18 states reported monthly job losses in August.
Today, the Department of Labor confirmed: Unemployment is up. CNNMoney reports Initial unemployment claims up:
The U.S. Department of Labor reported that initial filings for state jobless benefits increased by 15,000 to a seasonally adjusted 478,000 in the week ended Oct. 18. That’s a 44% increase from last year, when it stood at 333,000.
Unemployment is rising. The BLS mass layoffs summary yesterday indicated that September was not a good month for announcements:
In September, employers took 2,269 mass layoff actions, seasonally adjusted, as measured by new filings for unemployment insurance benefits during the month, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Each action involved at least 50 persons from a single employer; the number of workers involved totaled 235,681, on a seasonally adjusted basis. The number of mass layoff events this September increased by 497 from the prior month, while the number of associated initial claims rose by 61,726. Layoff events reached their highest level since September 2001, a month that experienced substantial layoff activity due to the September 11 attacks. Mass layoff initial claims reached their highest level since September 2005, which was a month with high layoff activity due to Hurricane Katrina. The effects of Hurricanes Gustav and Ike contributed to the higher September 2008 layoff activity. In September, 603 mass layoff events were reported in the manufacturing sector, seasonally adjusted, resulting in 81,414 initial claims.
Depending on the measure, mass layoffs are either bad or terrible. Unfortunately, layoffs are not looking that good for October, either.
FT reports Yahoo to axe one in 10 of workforce. Remember that they had a round of layoffs in February as well. It hasn’t been that great a year for Yahoo.
The layoffs follow Ebay’s announcement of a 1,500 reduction in its headcount this month and a wave of cuts by smaller web groups.
…
The company’s headcount has grown by 1,400 during the past two quarters to 15,200, but cuts of more than 1,500 will take place over the next two months.
3,000 jobs between Ebay and Yahoo.
An AP report I found through Yahoo Finance reports Goldman Sachs said to cut 10 percent of work force:
Goldman Sachs will cut about 3,260 jobs. Goldman’s work force, which was at record high levels at the end of the third quarter, will be pared back close to 2006 and 2007 levels. No additional cuts are planned, the person said. This person requested anonymity because the company hadn’t publicly disclosed details of the plan.
3,260 jobs.
Another AP report via Yahoo Finance reports Chrysler cutting 1,825 jobs with moves at 2 plants:
The cuts are about 6 percent of Chrysler’s U.S. hourly work force of 33,000.
1,825 jobs.
While 8,000 jobs doesn’t necessarily mean a worse report next month, this is only a total of 4 announcements. The US economy is extremely exposed to rising unemployment because of its 70% focus on consumption. Unfortunately, I expect more layoffs, and there doesn’t appear to be a strong sector to absorb these losses. There will be increasing downward pressure on wages. Here is an article about GM cutting benefits including 401(k) matching and tuition reimbursement for its salaried workers. I expect more benefit cuts from companies for a while, then genuine wage cuts. This is all entering a feedback loop, with no immediate relief in sight.
In three months, the job picture (unemployment, wages, benefits) will be worse than it is today.
