The US rounded out the year with another economic set back. Reuters and the New York Times were among the first to report that US employers cut as many as 85,000 jobs in December 2009, causing a big stir on Wall Street, and a ripple effect through the nation that forces Obama to reconsider his plan to reinvigorate the struggling economy and to spur job growth.
Examples of job cuts can be seen in various sectors. The New York Times Company said today that it would cut as many as 69 jobs, or 17%, of the work force at its money- losing Internet endeavor. Bank of America also released statements that it plans to cut between 30,000-35,000 jobs in the next three years in order to help smooth its acquisition of Merrill Lynch. Combining these two large firms calls for the elimination of duplicate jobs and the hardest hit sectors are expected to be in the research and investment banking divisions where there is much overlapping of duties and positions. Adding to the ranks of unemployed is Citigroup who is going to be laying off an estimated 52,000 employees, making this their largest single wave of layoffs in almost 20 years. Even some of the more stable Wall Street giants, are starting to feel the effects of the strained economy. Goldman Sachs has already initiated a round of layoffs to help offset its first quarterly loss as a public company.
What the White House Has to Say About Recent Layoffs
According to Christina Romer, Chairwoman of the Council of Economic Advisers: "The unemployment rate remains unacceptably high, which underscores the need for responsible actions to jump-start private-sector job creation. It is essential that we continue our efforts to move in the right direction and replace job losses with robust job gains."
Who is Effected and How
Everyone in the nation is feeling the effects of the one step forward, two steps back economic growth of the nation's economy. Consumers continue to struggle to keep up with debt that was accrued in better times, and to pay bills that are now out of people's financial comfort zones. It's not that consumers are spending more now or are spending more frivolously; it is that the conditions and circumstances have changed due to the economic state of the nation. Banks are feeling strained and overextended as well as they try to pay down debts they racked up on auto loans, credit cards and real estate mortgages. The effects of these jobs cuts can be felt all the way to the top as the White House and President Obama are getting hit hard by the pressure to reinvigorate the economy and stimulate job growth in the nation. The American Research Group, Inc. reported that the overall approval rating of Obama and the job he is doing as president are as low as 47%, and that 52% of people disapprove of the way Obama is handling the economy.
The Good News
While all of this seems to cast a shadow of doubt on the New Year, the good news is that despite the bad end to 2009, the job loss rate has slowed since the start of 2009 when it was much higher.
As we begin a New Year this is the perfect time to focus on a fresh start and a resolution to fix these problems. Lets leave the bad end to 2009 in the past and look towards a brighter future in 2010.