According to a report by ADP Employment Services, U.S. private-sector employers reduced jobs by 8,000 in September. Also, the August estimate of 33,000 job losses was increased to 37,000. Employment reductions are never good news, and they certainly are not fun to report. Moreover, we have not yet seen the full effect of the credit market turmoil in September, and the Institute for Supply Management (ISM) reported that its index of manufacturing activity dropped to 43.5 in September from 49.9 in August (any number below 50 indicates contraction). The ISM also reported that its manufacturing employment index dropped to 41.8 in September from the August level of 49.7. These are dramatic drops, and, historically indicate an economic recession. Though, by now, I think most of us realize that we are in a recession. In any event, given these numbers, more layoffs should be expected.
One positive note: comparisons to the Great Depression do not seem to hold up. According to an article in The Economist:
Both the crisis and the authorities’ response have been called the most sweeping since the Depression. Yet the difference from that era are more notable than the similarities to it. From the stockmarket crash of 1929 to the federally declared bank holiday that marked its bottom, three and a half years elapsed, and unemployment reached 25%. This crisis has been under way for a little over a year and unemployment is just over 6%, lower even than in the wake of the last, mild recession [2001-2003]. More than 4% of mortgages are now seriously delinquent … but the figure topped 40% in 1934.
The key for now is to save and/or reduce your debts so you can maximize your opportunities when the U.S. economy turns around.
Source:
The doctor’s bill
The Economist
http://www.economist.com/finance/displaystory.cfm?story_id=12305746
Gregg D. Killoren
victoria1014
