Filed under: Forecasts, Bad news, Employees, Economic data, Housing, Recession
The Wall Street Journal is reporting about the novel theory that this recession might have fewer job cuts than those in the past. The paper states that “in past recessions, job losses have eventually gotten much more severe, marked by nationwide cuts reaching 300,000 or more per month. This time — and these are hazardous words — maybe it is different.”
The argument here is based on the fact that job growth has been slow recently meaning there is not “a lot of fat” to cut.
It is a specious argument which might make some people feel superior for a few weeks. With car sales off 14% last month and home prices down by as much as 25% in some markets, this recession is beginning to look like a deep one. Big layoffs have already begun at financial services companies. Retailers may be the next to dump employees, especially if sales are weak in April and May.
The next huge round of layoffs is likely to happen in the airline industry. High fuel prices are causing tremendous losses. If several airlines merge, there will be cuts. If fuel prices stay high, there will be cuts.
As the recession deepens, it will consume industry after industry. Like dominoes dropping, the layoffs are sure to come.
Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.
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