July 5, 2001

And the Bad News Keeps on Coming

More Americans are joining the ranks of the unemployed.And it's only going to get worse.

The U.S. Labor Department reported today that the number of workers filing for unemployment benefits last week increased to 399,000. In addition, according to outplacement firm Challenger, Gray and Christmas, layoffs announced by U.S. companies last month rose 56 percent. The number of job cut announcements increased from 80,140 in May to 124,852 in June -- the sixth time in the last seven months that this number exceeded 100,000.

Companies will continue to cut jobs to improve the bottom line, as earnings continue to decline. Federated Department Stores, Knight Trading Group Inc., and WorldCom Inc. all issued earnings warnings today. They add to the 600 other such warnings issued since late May, according to Thompson Financial/First Call.

And these numbers won't improve, as the growing wave of job cuts drowns consumer confidence and spending. If consumers don't spend, companies don't make money.

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