The unemployment rate in the US probably jumped last month to the highest level in 16 years as slumping sales forced employers to slash staff, economists project reports this week will show.
Unemployment climbed to 7.5 percent and payrolls fell by 530,000, the 13th consecutive decrease, the median estimate in a Bloomberg News survey showed ahead of US Labor Department figures to be released on Friday. Other reports could show manufacturing, services and housing shrank further, signaling more firings ahead.
Plunging demand and frozen credit are causing companies from Caterpillar Inc to General Motors Corp to pare jobs and output to prevent unsold goods from piling up. Concern that the recession will deepen after the economy contracted at the fastest pace in 26 years last quarter was prompting US President Barack Obama to push for quick passage of his stimulus plan.
PHOTO: AFP
“The labor market will look terrible for a while,” said Sung Won-sohn, a professor of economics and finance at California State University Channel Islands, in Camarillo, California. “If the downward momentum is not arrested, the consequences could be disastrous. Policy makers need to act quickly.”
The jobless rate in December reached 7.2 percent. Employers cut 524,000 workers from payrolls that month, bringing total job losses last year to 2.6 million, the most since 1945.
This week’s report may also show manufacturers cut 143,000 jobs following a reduction of 149,000 in December that was the biggest since 2001, the Bloomberg survey showed.
The Institute for Supply Management’s factory index, due tomorrow, fell to 32.5 last month, the lowest level since 1980, from a reading of 32.9 the prior month, the survey median showed. A reading of 50 is the dividing line between growth and contraction.
The Tempe, Arizona-based group’s gauge for service industries, which make up about 90 percent of the economy, probably fell to 39 from 40.1.
That report is due on Wednesday.
Caterpillar, the world’s largest maker of bulldozers and excavators, said on Friday it would dismiss 2,110 factory workers, adding to the 20,000 job losses it announced last Monday.
“Depending on business conditions, more layoffs and separations may be required as the year unfolds,” the Peoria, Illinois-based company said in a statement.
Businesses were also slashing spending on new equipment. Factory orders fell 3 percent in December, the fifth consecutive decline, economists forecast ahead of a Commerce Department report on Thursday.
Automakers including GM, Chrysler LLC, Ford Motor Co and Toyota Motor Corp are scaling back North American output. GM, which already closed most of its 22 plants in North America last month, said it would eliminate shifts in the second quarter at plants in Ohio and Michigan and cut about 2,000 jobs.
The economy contracted at a 3.8 percent annual rate last quarter as consumer spending continued to slide.
The slump caused unsold goods to pile up, indicating more cutbacks are in the offing.
Beijing’s continued provocations in the Taiwan Strait reveal its intention to unilaterally change the “status quo” in the area, the US Department of State said on Saturday, calling for a peaceful resolution to cross-strait issues. The Coast Guard Administration (CGA) reported that four China Coast Guard patrol vessels entered restricted and prohibited waters near Kinmen County on Friday and again on Saturday. A State Department spokesperson said that Washington was aware of the incidents, and urged all parties to exercise restraint and refrain from unilaterally changing the “status quo.” “Maintaining peace and stability across the Taiwan Strait is in line with our [the
EXTENDED RANGE: Hsiung Sheng missiles, 100 of which might be deployed by the end of the year, could reach Chinese command posts and airport runways, a source said A NT$16.9 billion (US$534.93 million) project to upgrade the military’s missile defense systems would be completed this year, allowing the deployment of at least 100 long-range Hsiung Sheng missiles and providing more deterrence against China, military sources said on Saturday. Hsiung Sheng missiles are an extended-range version of the Hsiung Feng IIE (HF-2E) surface-to-surface cruise missile, and are believed to have a range of up to 1,200km, which would allow them to hit targets well inside China. They went into mass production in 2022, the sources said. The project is part of a special budget for the Ministry of National Defense aimed at
READY TO WORK: Taiwan is eager to cooperate and is hopeful that like-minded states will continue to advocate for its inclusion in regional organizations, Lai said Maintaining the “status quo” in the Taiwan Strait, and peace and stability in the Indo-Pacific region must be a top priority, president-elect William Lai (賴清德) said yesterday after meeting with a delegation of US academics. Leaders of the G7, US President Joe Biden and other international heads of state have voiced concerns about the situation in the Strait, as stability in the region is necessary for a safe, peaceful and prosperous world, Lai said. The vice president, who is to be inaugurated in May, welcomed the delegation and thanked them for their support for Taiwan and issues concerning the Strait. The international community
COOPERATION: Two crewmembers from a Chinese fishing boat that sank off Kinmen were rescued, two were found dead and another two were still missing at press time The Coast Guard Administration (CGA) was yesterday working with Chinese rescuers to find two missing crewmembers from a Chinese fishing boat that sank southwest of Kinmen County yesterday, killing two crew. The joint operation managed to rescue two of the boat’s six crewmembers, but two were already dead when they were pulled from the water, the agency said in a statement. Rescuers are still searching for two others from the Min Long Yu 61222, a boat registered in China’s Fujian Province that capsized and sank 1.03 nautical miles (1.9km) southwest of Dongding Island (東碇), it added. CGA Director-General Chou Mei-wu (周美伍) told a