Announced job cuts rose to 42,897 last month, from a six- year low of 37,178 in July 2006, Chicago-based Challenger, Gray & Christmas Inc. said today. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of monthly figures.The housing market will surely add to the jobless numbers as cuts in construction and other trades associated with home building will surely grow as the housing decline continues. The other area of concern is the financial service area if a protracted downturn in the stock market takes hold.
So far this year, the pace of announced job reductions is 8 percent less than a year earlier, a sign demand for workers remains resilient, the report said. Government figures this week may show employers added enough workers in July to hold the jobless rate near a six-year low, according to the median forecast in a Bloomberg News survey.
Any significant jump in the unemployment numbers will have a bad psychological impact on consumers who are responsible for two thirds of the economy. We could be looking at the start of the perfect storm that brings our economy into recession and insures a Democratic presidential victory in 2008.