Jobs and job security.
Executives, employees and investors are all thinking about these issues as the steady drumbeat of layoffs is threatening to dash hopes that the stock market’s recent rebound is foreshadowing a bottoming of the economic slowdown.
On Friday morning, the Labor Department reported that the unemployment rate climbed to 4.5 percent in April. Analysts were looking for a 4.4 percent unemployment rate. This is the highest rate since October 1998.
Even more frightening, non-farm payrolls declined by 223,000 jobs. Economists polled by Reuters expected U.S. payrolls to add 5,000 jobs. This is the steepest one-month decline in payrolls since February 1991.
Average hourly wages climbed by 0.4 percent.
The news has quickly fueled speculation that the Federal Reserve will step up to the plate with another two rounds of 50-basis point rate cuts, one very soon, since this news could dampen consumer confidence and consumer spending.
The jobs-related news wasn’t good on Thursday either.
For example, first-time applications for state unemployment benefits rose to 421,000 for the week ended April 28, the highest level in more than five years.
In addition, on Thursday outplacement firm Challenger, Gray & Christmas said the number of corporate layoffs during April hit a record.
And, the National Association of Purchasing Management’s most recent non-manufacturing survey showed that the services sector will weaken in the coming months, causing more job cuts in an area of the economy which has so far avoided the steep decline.
Meanwhile, another round of major corporations announced significant layoffs. For example: