Employment Layoffs Widen in Economy, More Sectors Impacted

Business Week Reports,  January 27, 2009, "Already 170,000 jobs have been lost in January. The U.S. economy lost 2.6 million jobs in 2008."  The worst news, though, may be that some economists say in their most optimistic view the U.S. has only reached the halfway mark in terms of the layoffs expected for this recession. A growing number of economists also say that the U.S. economy is not just shedding jobs temporarily, but may be undergoing a painful restructuring process that will eliminate some types of jobs for good. "We are seeing very large layoffs—the kind you get when companies don't expect to be re-employing any time soon," says Peter Morici, a professor at the Robert H. Smith School of Business at the University of Maryland. "They [represent] structural, not cyclical, changes to the economy. We're looking at a permanently smaller economy with prolonged unemployment at an unacceptable level." "We are very early in the cycle," says Morici. "We are going to see the fury of the Old Testament for what we have done to the economy."  Read the whole article at: http://www.businessweek.com/bwdaily/dnflash/content/jan2009/db20090126_735128.htm?chan=top+news_top+news+index+-+temp_top+story

The theme was continued by the New York Times that led off with this sentance, "Furloughs, wage reductions, hiring freezes and shorter hours simply did not do enough," The New York Times reported another 75,000 job losses from Caterpillar (20,000), Pfizer (19,500), Home Depot (7,500), Sprint (8,000), Microsoft (5,000), Texas Instruments (3,400).  Additionally, seasonal employment was down in 2008, "After a dismal holiday shopping season, retailers are letting employees go in droves. More than 66,600 retailing jobs were lost in December, the worst period since the late 1930s."  Read the whole article at: http://www.nytimes.com/2009/01/27/business/economy/27layoffs.html?ref=us

Perhaps the most quotable notable was offered by the Senior Economist Morici who said housing, real estate, automobiles, finance, and retail sectors are resetting to "permanent lower levels" of employment. Mike Montgomery, an economist with IHS Global Insight, asserts that many jobs in autos, manufacturing, apparel, and textiles aren't coming back. Those industries "have been in a long-term decline, and the recession is knocking them out."