WICHITA — Here’s an interesting comment from John Challenger in today’s Challenger, Gray and Christmas layoff report. October was a good month with just 43,000 announced layoffs, but he’s cautious.
“Job cuts in government and financial services dropped significantly last month, but the two sectors are not out of the woods, by any means. Most of the government cuts this year were at the state level. We have yet to see the full impact of mandated federal spending cuts. Anticipated cuts at the U.S. Post Office alone could result in more than 200,000 job cuts,” said Challenger.
“Meanwhile, the European debt crisis is wreaking havoc on Wall Street. Commercial banks and mortgage lenders are still unstable in the wake of the housing collapse. Home sales and prices have rebounded only slightly and the millions of homes in foreclosure are basically ticking time bombs sitting on the banks’ balance sheets,” he added.
“We seem to be in a pattern of two or more consecutive months with low job-cut totals, followed by a sudden spike one month, typically resulting from a small number of large layoffs. But, this is not surprising in light of how slow and uneven this recovery has been. We will probably see more of the same through the first half of 2012,” said Challenger.
One of the things that feels different about this recession than previous ones are the government layoffs. Other recessions were shorter, of course, and we didn’t have as much government debt, so there wasn’t any pressure to cut government. This time, though, just as the private sector seems to be clawing its way back, governments are being forced to cut, prolonging the jobs slump.