Saturday, January 17, 2009

More job cuts announced

Apparently Circuit City isn't the only company that has announced job cuts. From MSNBC News:

NEW YORK - This is the point in the recession where one round of job cuts leads to another.

Employers announced a total of nearly 40,000 job cuts Friday, almost all of them related to problems in other parts of the economy.

Circuit City Stores Inc. said it is liquidating, closing all its U.S. stores and cutting 30,000 jobs after being hobbled, in part, by declining consumer spending. Rental car company Hertz Global Holdings Inc. is eliminating 4,000 jobs worldwide as families and business travelers forgo trips. Insurer WellPoint Inc. is cutting about 1,500 jobs, with rising unemployment leading to fewer people with health insurance.

For the moment, every economic action seems to precipitate a negative reaction. Consumers made nervous by job cuts, tumbling home prices and swooning stocks aren't spending. That's hurt retailers and manufacturers, who have closed stores, cutting their employees' jobs or hours, which has made workers more nervous, so they spend less. And the spiral continues.

Even falling gas prices will have hurt some workers. Petroleum company ConocoPhillips said Friday it will cut about 1,300 jobs, or 4 percent of its work force.

"There does seem to be a painful cycle emerging," said Dana Saporta, U.S. economist at investment bank Dresdner Kleinwort in New York. "Halting this cycle will require very aggressive fiscal and monetary policy."

The snowball is growing bigger. President-elect Barack Obama has been making the pitch for the $825 billion stimulus package, even before his inauguration. House Republicans are shocked over the House Democrats' stimulus package, even to the point where House Minority Leader John Boehner stuttered, "Oh my God!" A 56 percent majority of the American public is supporting the Obama stimulus plan. Why? Because as more job cuts are announced, more Americans lose their homes due to foreclosures, and more economic pain is being felt by the American people, they desperately want to see some type of action from their government in Washington, and from their new president. After eight years of the Bush administration's disasters and failures that have wreaked this country, the American people want to see their new president succeed, and pull this country out of the deep hole that it is in. So for the first half of this new year, there are a lot of Americans that are holding their breath over what President-elect Obama, and the Democrats, will do for them.

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