Job cuts continue to rise

WASHINGTON – The largest payroll cut in at least a decade has economists expecting December’s unemployment figures to be worse than what they were in November.
“The level of unemployment is going to be higher” and may exceed 10 percent, Martin Feldstein, the former National Bureau of Economic Research president and Harvard University professor said in a Bloomberg Television interview. “It’s really bad and it needs a fix.” The final unemployment report for 2008 is due at the end of the week.
According to ADP Employer Services, which has been reporting on payroll data since 2001, companies cut 693,000 jobs in December, according to Bloomberg News. At the same time, outplacement firm Challenger, Gray & Christmas said that U.S. employers announced terminations of 166,348 in December, an increase of 275 percent from December 2007.
As the latest job cut reports come in, it is becoming clear that they are spreading throughout the economy. “Job losses have spread very aggressively into the services economy,” Joel Prakken, chairman of Macroeconomic Advisers LLC, said in a conference call reported by Bloomberg News. He said he expects that 2 million more jobs will be lost in 2009, bringing the total for the recession to 4 million.
“Unemployment [in the nation] is going to rise to 8.5 percent by mid-year,” said Michael Feroli, an economist at JPMorgan Chase & Co. in New York, “and our hope is that it stops there.” The jobless rate stood at 6.7 percent in November.
“That’s going to be a further drag on consumer spending,” Feroli added.
The U.S. Department of Labor will release national unemployment data for December on Friday morning.