![]()
- White House to Crank Up Pressure on Mortgage Industry
- Treasury Threatens Banks, Not Borrowers
- Dubai World to Restructure About $26 Billion of Debt
- Cramer: Dubai Can’t Sink These 6 Dividend Stocks
- Bove: 26 Banks May Need To Raise More Capital
- Lesson From Dubai: Start Cutting Risk In Your Portfolio
- Iranian Seizure of British Yacht Pushes Oil Above $77
- Should Homeowners Be Able to Stop Paying Mortgage?
- Buffett's Predictions For Next Year—And Every Year
- Treasury Threatens Banks, Not Borrowers
- We're Approaching a Market Bubble: Portfolio Manager
- Hershey Shares: What Options Are Saying
- Nov. 30: Unusual Volume Leaders
- Why Careful Shoppers Are Great for the Box Office
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Best Online Retailers to Buy Now: Internet Analyst
- ESPN The Magazine’s Body Issue: A Financial Success
- Cyber Monday: The Last Vestige of Dotcom Hype
MOST SHARED
- Timeless and Time-Tested Warren Buffett Watch Predictions
- Goldman Sachs Party Ban: No Gatherings of 12 or More
- Should Homeowners Be Able To Walk Away From Mortgage?
- Dubai World Set to Restructure About $26 Billion of Total Debt
- Nov. 30: Unusual Volume Leaders
- Blue Nile CEO: 'We're Having the Best Cyber Monday Ever'
- Treasury Threatens Banks, Not Borrowers
- Oil Demand Sees Year-Over-Year Rise, First Since 2007
- Notre Dame Fires Charlie Weis After 5 Seasons
- Bove: 26 Banks May Need To Raise More Capital
These will be decidedly unhappy holidays for hundreds of thousands of workers who won't have jobs thanks to the steep economic downturn and the financial crisis.
![]() |
At a time when the economy usually creates about 300,000 jobs during the November-December holiday span, economists predict it likely will lose about twice that, creating a void of about 1 million fewer jobs this year.
The pain from such a yuletide contraction will be felt far and wide. Friday's jobs number will provide the first indication of how bad things are so far, but not about how bad they'll get.
"There's a newfound urgency on the part of companies to get their financial houses in order so that they can brace themselves for what lies ahead in the weak global economy and then be in a position to respond to it swiftly with a leaner, meaner work force," says David Ressler, chief economist at Nomura Securities in New York.
"That's going to be one of the many factors holding back consumer spending during the holidays," he adds. "It's definitely going to be a tough Christmas for a lot of people."
For Investors:
- Pros Say: More Retailers to Go Under
- Pimco's Gross: Stocks Good for Long Run
- Charts Predict S&P to Rally 15 Percent
- Cramer: Analyst Wrong in Calling Bottom
- Experts Say: Dump Cash--Buy Equities, Gold, Coffee
Analysts expect the retail and manufacturing industries to get hit hardest—in general, anything consumer-related—with health care and educational services to be largely spared.
The worst of the layoffs will occur in the coming three or four months, with the consensus for a let-up happening around the end of the second quarter in 2009.
But until then—and especially during the holiday season, which retailers rely on for their lifeblood—the onslaught of job cuts will be brutal, with even the temporary workers that stores hire affected.
"For individual households it's devastating and it's painful and it's just about every horrible adjective you can attach to it, " Ressler says. "But it does come to an end. When it does, the economy will start to improve, people will start getting their lives back in order."
Cleaning Up Balance Sheets
Job losses always have had a ripple effect through the economy. But during a time when retail sales are so weak and housing continues to struggle, the unemployment numbers will be felt especially hard.
The monthly jobless claims report—November's is due Friday and will be closely watched—is only a lagging indicator of what happened in the previous month.
What's scarier, then, is what lies ahead, and December's number will provide even more gloom. AT&T unveiled plans Thursday to cut 12,000 workers starting immediately, while DuPont will lay off 2,500 and Credit Suisse will slash 5,300 from its payrolls.
"What happens is it feeds on itself," says Quincy Krosby, chief investment strategist at The Hartford. "Businesses will watch what their competitors are doing, particularly in an environment where you're not seeing much demand. You don't want your competitors to have an advantage, and part of that is your competitor is cutting costs. Chances are it will lead to more cuts on your balance sheet."
"You look at the retailers dealing with razor-thin margins, probably at the stage where they just want to clear inventory—hardly a scenario for hiring," she adds.
With investors clamoring for tighter bottom lines, companies will be under intense pressure to clean house before closing the books on 2008, with layoffs carrying over by some estimates through much of 2010
"It's a real shame but that's the way things work these days. It takes a long time to get back to profitability, particularly when we have pretty modest economic recoveries," says Kurt Karl, chief US economist at Swiss Re. "You hope it's not going to happen before the holidays, but businesses have to do what they have to do."
- Ever wished your cab driver would stop chatting and just get to where you're going? Well, that moment is closer than ever.
- UPS is giving its customers the option to offset its carbon emissions when sending a package.
- Romania's presidential campaign has been rocked by a video that may show the president striking a 10-year-old boy.
- Raising alligators is hard work, and the fickle taste of rich consumers has just made it much harder, says the NY Times.
- A recent issue of ESPN Magazine was one of its top sellers ever, and it only took scantily clad athletes to make it happen.
- The continued real estate boom in China is partially fueled by a generational flood of newlyweds.











