People: What’s the big surprise?
Yeah, the job numbers are terrible. Companies cut nearly 600,000 jobs in January. The unemployment rate jumped to 7.6 percent. The numbers are the worst since…. (Aren’t you getting tired by now of hearing that the latest economic indicator is the worst since before you were born, or since Noah filled the ark? Okay then, I’ll spare you on this one.)
The news stories breathlessly point out that the January job numbers were “worse than expected.” That’s a technicality, at best. Everybody knows the job picture is awful and getting worse. Remember late last year when Citigroup said it was cutting 52,000 jobs? Bank of American 30,000 jobs? AT&T 12,000 jobs? The five-digit layoffs were so startling that they obscured lesser layoffs of 6,000 or even 8,000 – a relative rounding error in the awful math we face today.
Those layoffs are now happening. And they’re going to keep happening. If you’re wondering what the next batch of unemployment numbers will look like when the government releases them on March 6, consider the job cuts announced in January: Caterpillar, 20,000. Home Depot, 7,000. Sprint Nextel, 8,000. Boeing, 10,000.
[See how Wall Street continues to doom itself.]
This is just the beginning of a long list. Outplacement firm Challenger, Gray and Christmas tallied up the announced job cuts – a fraction of the total, since many employers don’t announce it when the hatchet man is on the prowl – and came up with 248,475 for January. That’s the worst monthly total in seven years. (Well, it could be worse.)
So here what that means: The unemployment rate for February will probably jump to about 8 percent. Then it will go to about 8.4 percent. Sometime after that, 8.8 percent. Most economists think it will peak late this year or early next year at well over 9 percent, and maybe over 10.
[See why "Wall Street talent" is an oxymoron.]
Economists will try to pin down the exact numbers ahead of time, and if the consensus is off by .1 or .2, it will be considered news. But not really. What WILL be new is corporate silence – an absence of draconian job-cut announcements. Once that happens (or doesn’t), the unemployment rate might plateau. The dismal superlatives will disappear. Then, with even less notice, companies might start hiring again. Someday.