Job Cuts Up 275% From 2007, Wall Street Sank After Opening Bell

Written By: admin on January 7, 2009 No Comment

Wednesday, January 7, 2009, U.S. private-sector firms shed 693,000 jobs in December, far worse than expected, according to the ADP employment index released Wednesday.

Employment in the services sector fell by 473,000, while employment in the goods-producing sectors fell by 220,000.

Plotted layoffs at U.S. firms eased in December from the previous month’s seven-year high but they were up an astounding 275% annually as the year-ancient recession cut a huge swathe of destruction through job market.

The report said heavy job-cutting could continue through at least the first half of 2009, and the outlook afterward hinges on President-elect Barack Obama’s plans to stimulate the economy through increased government spending.

“The economy could start to mount a comeback in the second half of the year, if the new administration can achieve quick passage of its proposed economic and job-growth stimulus package,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.

“The plot to rebuild the nation’s crumbling infrastructure will benefit not only laborers on the front lines, but it will push up through the economy, making jobs for manufacturing workers, engineers, architects, technology specialists, etc.”

Job cuts announced in December totaled 166,348, down 8.4% from November’s 181,671, Challenger, Gray & Christmas said. Overall, employers announced 1,223,993 job cuts in 2008, the largest annual total since 2003, when there were 1,236,426 job cuts.

It was the largest total for any December since Challenger started tracking layoffs in 1993.

Employers announced 460,903 job cuts in the fourth quarter alone, producing the largest one-quarter total since 478,905 job cuts were announced in the first three months of 2002.

The financial sector was at the epicenter of the economic turmoil in 2008 and, not surprisingly, job cuts.

The financial sector announced plans to shed 260,110 workers, the third largest annual industry total on record behind the 317,777 job cuts and 268,851 job cuts announced by the telecommunications sector in 2001 and 2002, respectively.

The automotive industry was the second-largest downsizing industry of the year, with 127,281 announced cuts followed by transportation at 82,859.

The financial sector also topped the December layoffs with 39,604.

The Challenger data comes ahead of the government’s closely watched non-farm payrolls report on Friday, which is expected to show 500,000 jobs were lost in December, according the the median of forecasts in a Reuters poll.

In Stock Market, Slammed by a wave of dire news, Wall Street sank after Wednesday’s opening bell as the markets react to a prediction the U.S. lost nearly 700,000 private-sector jobs last month and guidance cuts from Intel and Time Warner.