ASHINGTON – With the economy sinking faster, employers are giving more Americans dreaded pink slips right before the holidays.
The
Labor Department releases a new report Friday that's expected to show
the employment market deteriorated in November at an alarming clip as
the deepening recession engulfed the country.
After bolting to a 14-year high of 6.5 percent in October, the unemployment rate
likely climbed to 6.8 percent last month, according to economists'
forecasts. If they are right, that would mark the worst showing in 15
years.
Skittish employers, which have
slashed 1.2 million jobs this year alone, probably axed another 320,000
last month, economists forecast. If that estimate is correct, it would
represent the deepest cut to monthly payrolls since October 2001, when
the economy was suffering through a recession following the Sept. 11 terrorist attacks.
Employers
are slashing costs to the bone as they try to cope with sagging
appetites from customers in the United States as well as in other
countries, which are struggling with their own economic troubles.
The carnage — including the worst financial crisis since the 1930s — is hitting a wide range of companies.
Just in recent days, household names like 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. announced layoffs.
Fighting for their survival, the chiefs of Chrysler LLC, General Motors Corp.
and Ford Motor Co. will return Friday to Capitol Hill to make a pitch
to lawmakers for the second straight day for as much as $34 billion in
emergency aid.
Worn-out consumers
battered by job losses, shrinking nest eggs and tanking home values
have retrenched, throwing the economy into a tailspin. As the
unemployment rate continues to move higher, consumers will burrow
further, dragging the economy down even more, a vicious circle that
Washington policymakers are trying to break.
Federal Reserve Chairman Ben Bernanke
is expected ratchet down a key interest rate — now near a historic low
of 1 percent — by as much as a half-percentage point on Dec. 16 in a
bid to breath 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, the overseer of a $700 billion financial bailout program, is weighing new initiatives, too, even as his remaining days in office are numbered.
President-elect
Barack 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.
The
United States tipped into recession last December, a panel of experts
declared earlier this week, confirming what many Americans already
thought.
At 12 months and counting, the recession is longer than the 10-month average length of recessions since World War II.
The record for the longest recession in the postwar period is 16
months, which was reached in the 1973-75 and 1981-82 downturns. The
current recession might end up matching that or setting a record in
terms of duration, analysts say.
The 1981-82 recession was the worst in terms of unemployment since the Great Depression. The jobless rate rose as high as 10.8 percent in late 1982, just as the recession ended, before inching down.
Given
the current woes, the jobless rate could rise to as high as 8.5 percent
by the end of next year, some analysts predict. Projections, however,
have to be taken with a grain of salt because all of the uncertainties
plaguing the economy. Still, the unemployment rate
often peaks after a recession has ended. That's because companies are
reluctant to ramp up hiring until they feel certain the recovery has
staying power.
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