Nearly a quarter of a million Americans start the new year newly laid off, following mass layoffs in November.
Based on new filings for unemployment insurance benefits, the U.S. Department of Labor’s Bureau of Labor Statistics reports 2,150 employers issued pink slips to 240,028 workers. Manufacturing industries – especially transportation equipment, food processing and construction machinery – were the hardest hit, accounting for 33 percent of all mass layoffs and 39 percent of all initial claims.
Fifteen percent of all layoffs and 13 percent of all initial claims filed during the month were in construction, mostly in highway, street and bridge construction. Twelve percent of layoffs and initial
claims in November were from administrative and waste services, largely temporary help services. Agriculture, forestry, fishing and hunting accounted for 11 percent of layoffs and 7 percent of initial claims, primarily among farm labor contractors and crew leaders.
California bore the brunt of November’s mass layoffs, followed by Wisconsin, Texas and Illinois. These four states accounted for 47 percent of all layoffs and 44 percent of initial claims for unemployment insurance.
In November 2001, there were 2,721 mass layoff events involving 295,956 workers.
Ironically, the Mass Layoff Statistics Program, which releases the monthly figures on layoff events, is itself newly laid off. Funding for the program, which has been provided by the Department of Labor’s Employment and Training Administration since 1994, has ended.
Nationwide unemployment was 6 percent in November, matching an eight-year high set in April, and some economists believe it could rise as high as 6.5 percent by the middle of 2003.
The masses of newly unemployed may factor into the abysmal holiday shopping season, which, when all statistics are in, is expected to be the weakest in more than 30 years in terms of sales growth.
“Weak retail sales over the holidays clearly reflect the current mood of consumers,” said Lynn Franco, director of the Conference Board’s consumer research center. “Until there is an improvement in labor market conditions, there is not likely to be a significant upturn in consumer confidence.”
Franco’s pronouncement comes as the New York-based research group reported that consumer confidence fell in December for the sixth time in seven months. The group’s Consumer Confidence Index dropped four points to 80.3 from a revised 84.9 in November, the only month the index rose since June. Analysts had been expecting a reading of 88.0 in December.
The Conference Board’s index is based on a monthly survey of some 5,000 U.S. households and compares results to its base year, 1985, when it stood at 100.
Consumer confidence is closely watched by analysts because consumer spending accounts for two-thirds of the nation’s gross domestic product, or overall economic activity.
According to the Conference Board, consumers’ assessment of current conditions is more dour than in November. Those rating current business conditions as “good” decreased to 14.6 percent from 16.1 percent. Those holding the opposite view remained unchanged at 25.8 percent.
The employment outlook also is less favorable. Consumers reporting jobs are “hard to get” rose to 29.8 percent, up from 27.3 percent last month, while those claiming jobs are “plentiful” fell to 12.4 percent from 14.2 percent.
Consumers expecting fewer jobs in the coming months rose to 20.2 percent, up from 18.8 percent, while those anticipating more jobs dipped to 15.1 percent from 15.4 percent.
The survey found that income expectations are also less optimistic. Currently, 18.7 percent of consumers anticipate an increase in their incomes, down from 19.4 percent in November.
Hope is on the distant horizon.
Bureau of Labor Statistics figures indicate the American economy will be short at least 10 million workers by the end of this decade, Sharon Jordan-Evans, a California-based workplace consultant, told the Chicago Tribune.
The expected shortage is partly because 43 percent of the civilian labor force, and fully half of government workers, will be eligible for retirement by 2010.