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Thread: Half-million jobs vanish as economy deteriorates

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    Elite Member celeb_2006's Avatar
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    Thumbs down Half-million jobs vanish as economy deteriorates

    Half-million jobs vanish as economy deteriorates - Yahoo! News

    WASHINGTON An alarming half-million American jobs vanished virtually in a flash last month, the worst mass layoffs in over a third of a century, as economic carnage spread ever faster and the nation hurtled toward what could be the hardest hard times since the Great Depression.
    Underscoring Friday's dismaying signs of a rapidly deteriorating economy, General Motors announced yet more job cuts, and a record number of homeowners were reported behind on mortgage payments or in foreclosure.
    Somehow Wall Street found a silver lining, betting that so much bad news would force fresh government action to revive the foundering economy. The Dow Jones industrial rose 259 points.
    Staring at 533,000 lost jobs, economists were anything but hopeful. Since the start of the recession last December, the economy has shed 1.9 million jobs, and the number of unemployed people has increased by 2.7 million to 10.3 million now out of work.
    Some analysts predict 3 million more jobs will be lost between now and the spring of 2010 and that the once-humming U.S. economy could stagger backward at a shocking 6 percent rate for the current three-month quarter.
    "The economy is in a free fall," said Richard Yamarone of Argus Research. "It is as if someone flicked off the switch on hiring."
    "It's a mess," said Mark Zandi, chief economist at Moody's Economy.com. "Businesses, battening down the hatches, are concerned about their survival and are cutting workers."
    President-elect Barack Obama said the crisis "is likely to get worse before it gets better," and no one was going to argue that point. Economists predicted the unemployment rate, which rose to a 15-year high of 6.7 percent in November, could soar as high as 10 percent before skittish employers begin hiring again.
    The jobless rate would have bolted to 7 percent for the month if not for the exodus of 422,000 people from the work force for any number of reasons going back to school, retiring or simply abandoning job searches out of sheer frustration. When people stop looking, they're no longer counted in the unemployment rate.
    The rate was at 4.7 percent just one year ago, 6.5 percent in October.
    Employment shrank in virtually every part of the economy factories, construction companies, financial firms, accounting and bookkeeping, architectural and engineering firms, hotels and motels, food services, retailers, temporary help, transportation, publishing, janitorial and building maintenance, and even waste management. The few fields spared included education, health care and government.
    The United States already in recession for a year, may not be out of it until the spring of 2010 making for the longest downturn since the Great Depression of the 1930s, economists are now saying. Recessions in the mid-1970s and early 1980s last 16 months.
    Unemployment peaked at 10.8 percent in 1982, terrible but still a far cry from the Depression, when roughly one in four Americans were out of work.
    That said, more pain is certainly in store. Fresh evidence:
    A record one in 10 American homeowners with a mortgage was either at least a month behind on payments or in foreclosure at the end of September, the Mortgage Bankers Association reported.
    General Motors, already pleading with Congress for billions of dollars to survive the month, said it would lay off an additional 2,000 workers as it cuts shifts at three car factories starting in February due to slowing demand for GM cars.
    President George W. Bush, who used the word "recession" for the first time to describe the economy's state, pledged Friday to explore more efforts to ease housing, credit and financial stresses.

    "There is still more work to do," Bush said. "My administration is committed to ensuring that our economy succeeds."
    President-elect Obama said the dismal job news underscored the need for forceful action, even as he warned that the pain could not be quickly relieved.
    "There are no quick or easy fixes to this crisis ... and it's likely to get worse before it gets better," Obama said. "At the same time, this ... provides us with an opportunity to transform our economy to improve the lives of ordinary people by rebuilding roads and modernizing schools for our children, investing in clean energy solutions to break our dependence on imported oil, and making an early down payment on the long-term reforms that will grow and strengthen our economy for all Americans for years to come."
    On a personal level, right before Thanksgiving, Mark Pierce, 51, who was executive pastor at a church in Mansfield, Ohio, was given a choice: get laid off or take a lesser job with a roughly 40 percent pay cut. His last day of work was Tuesday.
    "Anyone in that situation looks at it very personally," he said. "You say, 'Is this a cut across the board, or it just me?'"
    It's not just him.
    Employers are slashing costs as they cope with sagging sales in the U.S. and in other countries, which are struggling with their own economic troubles.
    In recent days, AT&T Inc., DuPont, JPMorgan Chase & Co., as well as jet engine maker Pratt & Whitney, a subsidiary of United Technologies Corp., and mining company Freeport-McMoRan Copper & Gold Inc. all have announced layoffs.
    Tom Solso, chief executive of Columbus, Ind.-based manufacturer Cummins Inc., said Friday the company planned to cut 500 jobs, or about 3.5 percent of its work force despite other cost-cutting moves such as temporarily shutting down plants, shortening work weeks and extending holiday shutdowns.
    Fighting for survival, the chiefs of Chrysler LLC, General Motors Corp. and Ford Motor Co. returned to Capitol Hill Friday to again ask lawmakers for as much as $34 billion in emergency aid.
    Workers with jobs did see modest wage gains in November. Average hourly earnings rose to $18.30, a 0.4 percent increase from the previous month. Over the year, wages have grown 3.7 percent, but paychecks haven't stretched that far because of high prices for energy, food and other items.
    Federal Reserve Chairman Ben Bernanke is now expected ratchet down a key interest rate near a historic low of 1 percent by at least a half-percentage point on Dec. 16 in a bid to breathe life into the moribund economy. Bernanke is exploring other economic revival options and wants the government to step up efforts to curb home foreclosures.
    Treasury Secretary Henry Paulson, whose department oversees the $700 billion financial bailout program, also is weighing new initiatives such as tapping the second half of that rescue money to ease the economic crisis.
    Obama, who takes office on Jan. 20, has called for a massive economic recovery bill to generate 2.5 million jobs over his first two years in office. House Speaker Nancy Pelosi, D-Calif., has vowed to have a package ready on Inauguration Day for Obama's signature.
    The measure, which could total $500 billion, would bankroll big public works projects to create jobs, provide aid to states to help with Medicaid costs, and provide money toward renewable energy development.
    For now that's cold comfort to Gary Cope, 33, who lost his communications job this week at Roanoke, Va.-based high-tech research and development company Luna Innovations Inc.
    Cope was called into a meeting first thing Thursday morning. The message: He was being laid off, for financial reasons, effective immediately.
    He left with a box of his belongings and about two months' severance. As Cope walked out the door, all he could think was, "I have a 3-year-old son and I'm a single dad." "I came home and did my initial pity party, then I got myself together, talked to my family and went right to work" rewriting his resume and sending it out, Cope said

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    What I don't understand is that despite all these mass layoffs the companies still manage to function OK. I know wages represent the biggest cost to an employer so it's the obvious way to make cuts but I still wonder how the companies can continue to function without the "important" employees they fire.

    MrAO used the 1980s recession in the UK to offload several workers who were either passengers or scoundrels and the business continued just fine. You have to wonder if the same thing is happening now in certain cases.
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    It is starting to worry me, as industries that were formerly doing well are now offloading people. And if the numbers of unemployed get high enough, spending will go way down and that will lead to even more layoffs.

    Hell, the whole things scares the shit out of me.

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    Elite Member azoria's Avatar
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    Yep, it's all bad.

    I've been underemployed/unemployed for 6 months. I have never had such a hard time getting a job. Never.

    And my application for unemployment was denied. I've collected unemployment twice before in my life and never met such resistance and discooperation from the unemployment office. They're impossible to contact in person now, all business is done over the internet, the phone, or by mail. There is no unemployment office in the state of Washington any more. Because of the first 3 digits of my SS# I can't even call them in any week before a Wednesday.

    I believe these alterations in the unemployment system are designed to make it extremely difficult to file or collect unemployment, and hence to keep the 'official' unemployment rate artificially low.

    Our retirement has lost 30%-40% of it's value. We'd have more retirement money saved right now if we had buried it in a coffee can in the back yard over the years.

    The economy is currently broken. I just worked all my life for nothing. It will not be possible in my remaining years to make up for these losses. I'm toast.

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    Elite Member Mariesoleil's Avatar
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    ^^So sorry to hear that Azoria


    Job picture could get even worse

    Unemployment likely to accelerate in December and into 2009 as economic outlook worsens amid a deep recession.



    NEW YORK (CNNMoney.com) -- In November, the U.S. economy shed jobs at the fastest rate in 34 years - and experts say December could be even worse.

    With the economy in a recession and most indicators signaling even more difficult times ahead, economists say job losses will likely deepen and continue through at least the first half of 2009.

    "The economy is now deteriorating with frightening speed and ferocity - it's truly horrific," said Bernard Baumohl, chief economist at the Economic Outlook Group. "We'll see significant declines going forward."

    Baumohl expects December's job loss total to exceed November's 533,000 announced by the government Friday, but remain in the 550,000 to 600,000 range. He predicts the economy will have lost 3 million to 4 million jobs for the two years ending Dec. 31, 2009.

    In 2008, the economy has lost more than 1.9 million jobs, two thirds of which came in the past three months.

    "Companies are reluctant in the beginning of a recession to lay off workers, but we've seen a sudden, dramatic acceleration in job losses in the last three months," said Baumohl. "Because companies are now in survival mode, they're reducing their most expensive cost, which is labor."

    Citing weak economic conditions, a slew of large-scale job-cut announcements came this week. On Thursday alone, AT&T (T, Fortune 500), DuPont (DD, Fortune 500), Viacom (VIA), Credit Suisse (CS) and Avis (CAR, Fortune 500) issued statements that totaled nearly 23,000 jobs lost, most of which will take place over the next several months.

    According to a report by outsourcing agency Challenger, Gray & Christmas, planned job cut announcements by U.S. employers soared to 181,671 last month, the second-highest total on record.

    Temporary employment, including workers employed by temp agencies, fell by 100,700 jobs last month, according to the Labor Department report. It was the highest level on record, which goes back to 1985.

    That could mean even more full-time payroll reductions to come, as employers often cut temporary workers before they begin cutting permanent staff.

    "CEOs are trying to get their businesses better positioned for the start of the year so they're not constantly chasing the slowdown," said Tig Gilliam, chief executive of placement agency Adecco, the nation's third-largest employment agency. "December will be another very tough month."

    Unemployment rate to spike

    The unemployment rate will likely rise throughout 2009 as well. According to the government's report, the unemployment rate rose to 6.7% from 6.5% in October. It was the highest unemployment rate since October 1993.

    Experts call the rate of unemployment a "lagging indicator," meaning it reflects the status of the labor market from many months ago. That's because the Labor Department only calculates the percentage of people that are unemployed who are actively looking for work.

    "The economy is really sick, and when times are bad, people quit looking for work," said Dan Seiver, finance professor at San Diego State University. "When times are better, it will pull some of those people back into the search, and it would be hard to believe the rate won't rise to at least 8%."

    Some economists look to the so-called under-employment rate to give a more accurate portrayal of the job market. The under-employment rate counts part-time workers who are unable to find full-time work as well as those without jobs who have become discouraged and stopped looking for work. That figure soared to 12.5% from from 11.8%, setting the all-time high for that measure since calculations for it began in January 1994.

    As a result, some economists see the headline unemployment rate rising to the double-digit levels of the early 1980s.

    This year is on a pace to become the worst year for jobs ever, based on records that date back to 1939. Some see even steeper losses in 2009 - but don't expect this recession to bring job-loss levels anywhere near the Great Depression, when the unemployment rate spiked to 25%.

    "This recession will last through 2009 and into early 2010, and it will probably be the worst period for jobs since the Great Depression," said Baumohl. "But by a great magnitude the Great Depression was so much worse, and we will never approach those levels."

    Job picture could get even worse - Dec. 5, 2008
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    Elite Member Quazar's Avatar
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    This is staggering. Where do all these people go who lost jobs? What happens to them? After the Government pays unemployment (if they pay), how do they live?

    Here's a sick thought - maybe they can go overseas and get their jobs back with their old companies....

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    Hit By Ban Bus! AliceInWonderland's Avatar
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    it will get even worse with nobody spending shit, stuff doesn't need to be manufactured its so sad and crime is on the rise like no other - everyday the news is full of robberies from charities, homeowners, stores and banks! its sickening, even 2 handcapped ppl were robbed of their wheelchairs in l.a. last week and 1 of them of her handicapp van.

    im shaking in my boots everyday at work actually. all my white-collared job holding friends as well. and for my friends in the service industry - times are really slow and tough.

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