Job Losses Hit 533,000 Last Month, Worst in 34 Years

Isn't that what the talking heads said earlier this year. How many times did they call a bottom. When I was driving I saw three bankruptcy sales. Now with all these layoffs consumers will start to be more frugal with their money, and the cycle will continue until some thing comes around to change it. Cheap credit helped revive our economy after 9/11, but I don't know what the imputes for the next wave.

 

So I guess now wouldn't be the time to leave your job for a new one, since they always say last hired, first fired?

 

You can always tell your prof you need another year in school.

 

I was a casualty of dat

 

My company just layed off 20 employees in our division out of a total of about 150. They are going to do the same in the other divisions.

I think it's gonna get a lot worse.

 

Just curious on your opinion. Given our over reliance on the service sector for job growth in the past 15 years, do you think we should let the big 3 automakers declare bankruptcy at this time?

 

I'm torn. I think that paying workers to not work, running really bad factories, and making cars that don't sell by GM and Chrysler are gross misallocations of resources and a net damage to the economy. However, they are American-owned companies that make finished consumer goods in America. That is important, and it's getting to be rare.

I certainly think the money is better spent on the Big Three than on the destroyers of capital on Wall Street, so as an either-or proposition, I'd certainly give them TARP funds. But unless they are able to do some radical restructuring, the loans will just float them along until the next disaster.

 

Thanks for the response, Wes. I don't think there's any right choices with this one. A sudden implosion would probably ripple out of control (employment, credit, supply concerns, unpredictable market for remaining car producers) and add on further fears in Wall Street.

IMO, future loans are inevitable, which is probably why Congress halved the proposed amount and structured the terms to expire around March. The thing disturbing me the most is that these guys are giving numbers and estimates with a recession as it is now and not should things get worse. Given these guys recent performance, profitability by 2010 would seem like a bit of a stretch to me...half a year ago.

Maybe we should merge GM, Chrysler, and NASA so they could make a car that can end all cars....






(because it would be too dangerous for the average person to drive)

 

My biggest fear has always been ending up with a useless degree. This job market sucks. I hope something changes.

Recessions become depressions over extended periods of time.

 

Allowing them to go bankrupt is the easy answer. I feel as though it may not be the right answer. If they go belly up, you will have tremendous job loss in a state (Michigan) which has already been hit hard by foreclosures, etc. The economy of that state will be officially doomed.

Then there is the ripple effect that would occur. This would be twofold. First you would have the direct effect. Suppliers to the big 3 would either go under or significantly shrink. That is more jobs lost and more decrease in value on the NYSE. Secondly, albeit more indirectly, there would be a freefall on the stock market generally that would result psychologically from the loss of an entire industry in the United States.

The fallout would be huge, and not in a good way. It could lead to the last threads holding our economy together to snap.

I, for one, don't want to risk it.

I do believe that any bailout would have to come with concessions. The big 3 would have to restructure their operations to become cost conscious and to eliminate waste. This probably means that GM would have to significantly pare back its product offerings. TQM and JIT inventory would have to be implemented in order to reduce carrying costs. The UAW would have to make concessions as well in order to keep its members employed. The UAW has indicated that they are willing to do this. At least they understand that concessions will have to be made...now we have to get the CEOs of the big 3 to understand that too.

 

Best idea yet:

http://www.edthesportsfan.com/2008/12/state-of-michigan-gets-traded-to-canada.html

 

LIFO

Last In First Out

 

Pretty much. I know somebody that got laid off from a mortgage company in November 2007. She got a new job and they started laying off people in March, so she left and found another job. If this company starts layoffs, she will be the first to go again.

 

The unemployment rate is a lagging indicator, not a leading one. As busienss are slow to adjust to changing economic environments...traditionally the last breath of a recession is layoffs...

We've been in a recession for a year, I doubt it will last much longer. The Stock Market is undervalued, and consumer spending is pretty much at the lowest level. As business adjust to survive the current slowdown, what is happening is everyone is waiting to see what happens.

But eventually, business have to spend. They have to invest in security, infrastructure, and spend on media. People have to buy their kids clothes and they still want to make a lot of those purchases they are holding off.

So things will rebound, but slowly. 2009 will not be a great year, but it won't be worse than 2008.

 

I hope Sweet Lou's trend of making ironic predictions is broken with his last post...

US non-farm payrolls
http://www.ft.com/cms/s/1/ba6bbd66-c2dc-11dd-a5ae-000077b07658.html
Published: December 5 2008 14:55 | Last updated: December 5 2008 22:19

The release of US non-farm payroll data is like a motorway pile-up. Everyone knows it means pain and suffering. Yet it is impossible to look away. Friday’s car crash was particularly nasty. The monthly jobs loss, the biggest since 1974, was far worse than expected. The overall report showed clearly that the US economy was suffering widespread internal bleeding.

It is now clear that the labour market has been in dire straits since before the bankruptcy of Lehman Brothers prompted the financial market meltdown. Downward revisions to September’s job losses, now more than 400,000, mean the economy was already shedding jobs at a rate last seen in 2000. Of the 1.9m jobs lost since last December – now officially dubbed the start of this recession – two-thirds vanished in the past three months across a broad range of sectors.

That the headline unemployment rate remains at a relatively benign 6.7 per cent is scant relief. The drop in the participation rate from 66.1 per cent to 65.8 per cent – a sharp fall in a series that has been remarkably stable since the early 1990s – indicates that discouraged job-seekers are giving up their search.

The number of people forced to work part-time owing to business conditions has jumped 80 per cent since last year. That has also contributed to a collapse in the aggregate hours worked. The signs are, therefore, that the headline rates are, to some extent, masking the underlying malaise.

There are two further oddities – neither of which are good. First, unemployment, usually a lagging indicator, seems to be deteriorating ahead of the fall in output, notes Lombard Street Research. That may be because financial turbulence, rather than falling output, accounts for some of the job losses to date. Second, in this back-to-front downturn, rising unemployment is trailing the jump in defaults and foreclosures. Buckle up – worse is coming.

EDITOR’S CHOICE
Monthly job cuts hit worst rate in 34 years - Dec-06
Foreclosures threat rises amid arrears crisis - Dec-05

 

The real problem would come if the credit ever dried up. And it could once all the foreign countries realize America is not the piggy bank they've thought it was and start strengthening their own financial markets.

 

I don't think you are addressing the seriousness of what is going on. you're right our economy has been driven by consumer spending, and what we are learning is that it can't last. the problem is going to be when the jobs dry up in this industries, what are people going to do?

 

Dig ditches to put broadband cables in every American's home?