Friday, March 6, 2009
The Department of Labor announced today that unemployment has risen to 8.1 percent, higher than expected and the highest rate since 1983. A staggering 651,000 jobs were lost in February bringing the total job losses to 4.4 million since December 2007.
Back in December I had been predicting unemployment would rise to over 9 percent by the end of 2009 and it appears that, unfortunately, we are on track. Some economists are predicting 10 percent by the end of 2010. One wonders if this will turn out to be a conservative prediction.
Factor in that several analysts are indicating the massive bailout for GM will not be enough to save the troubled Auto manufacturer from bankruptcy and we are definitely going to see the unemployment figure jump as the domino effect takes place across the North American auto industry.
Don’t forget to add in the continuing slide in real estate prices (how many millions of homes have mortgages worth more than the value of their house?), and the predicted additional defaults and we have the recipe for disaster. Are we in a deep recession or a depression?
Any thoughts on how we can get out of this mess? What can companies do to reduce expenses and minimize job losses?