April Layoffs Continue to Build

April 18, 2008

The markets love the Google numbers today and stocks are up strongly. But lets not forget that the layoff tally has been building on a near daily basis. These are only a few of the big layoff announcements this past month. JPMorgan has yet to announce layoffs at Bear Stearns (which currently employs 14k people) while Delta / Northwest has also yet to announce layoffs.

-9000 Citigroup 4.18.08
-4000 Merrill Lynch 4.17.08
-4000 AT&T 4.17.08
-730 Harley 4.17.08
-1600 AMD 4.17.08
-4000 Aloha Airlines and ATA 4.07.08
-2600 Motorola 4.04.08
-8800 Dell 4.04.08

I believe that the optimism in stocks will last into the coming week, but the US economy and particularly the US labor market remains vulnerable.

Earlier this month I warned that job losses could continue for the next 5 to 6 months.

Over the past 3 decades, the US economy has gone through 3 recessions. During these contractions, there were a string of job losses that lasted for a minimum of 10 months. We are already beginning to see this trend unfold. It will be months before we will see the economy start adding jobs once again. The largest single month job loss in each of the recessions was more than 300k. I wouldn’t be surprise to see the same degree of job losses in this business cycle.

Why should it be any different this time around?

Posted in Layoffs, non-farm payrolls