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Unemployment Woes To Worsen
-- November 4, 2002
Unemployment ticked up to 5.7% in October, and a recent survey tells us that job losses are likely to multiply in the months ahead. According to outplacement firm Challenger, Gray & Christmas, job cut announcements exploded 151% in October. That's a whopping 176,010 jobs that U.S. companies plan to slash from their payrolls in the coming months.
Those job cuts came even as the stock market enjoyed a rally. Clearly, companies are still struggling to improve their profit margins by cutting labor costs. But they'll soon discover that they've dug their own graves. As more workers lose their jobs, consumer demand will weaken, tightening profit margins even more.
After all, consumer confidence has already dwindled to its lowest level in nearly a decade. Higher unemployment will only strengthen consumers' pessimism about the economy and will force them to rein in their spending. And that means even slower growth -- or no growth at all -- for the economy.
Job Cuts Rocket Higher In October