The weak jobs market continues to deepen as industrial production sags further around the world.
The losses are concentrated in the US, but no major economy is being spared the pain.
Estimates in the US and UK media at the weekend said upwards of 100,000 jobs have so far gone in the first two and a bit weeks of 2009, with more than 22,000 losses being revealed on Friday alone.
Companies from finance, to manufacturing, technology, the media, retailing, cars, commodities and mining and health care revealed cuts, or plans to trim their employment levels.
More than 20 companies said on Friday alone that they were cutting jobs, ranging from Romania’s second-biggest fertilizer maker, to Fiat’s Magneti Marelli auto-parts division, Hertz, the second-largest US rental-car company, Clear Channel, the big US radio group, WellPoint, a health care insurer, oil refiner, ConocoPhillips, Advanced Micro, the computer chip group and General Electric. Honda, Toyota, Scania and other car groups cut jobs last week and revealed plans for big car and truck production cuts in the next three months.
The cuts ranged from Australia (mining in Queensland and Ford Credit in Melbourne) to Brazil, the US, China, UK, Western Europe, South Africa, Sweden, Germany, Japan and Botswana.
Circuit City, the failed US electrical goods retailer said on Thursday it would shutdown after failing to attract buyers: job losses could top 25,000. General Electric refused to put a figure on possible cuts after it confirmed reports that they were planned.
The reports said the losses could total 11,000 from its GE Capital division (That business cut several hundred jobs in Australia late last year).
Ford Credit cut jobs in Australia last week after it said it was leaving the retail car financing sector, but would continue to finance car dealers.
GE Money and GMAC, General Motors’ 49%-owned car financing arm, left the Australian car sector at the end of 2008.
Bloomberg quoted John Lonski, chief economist at Moody’s Capital Markets Group as saying: "What you take away here is just how miserably profitability performed in the final quarter of ‘08. Companies cut back on staff when sales are significantly under expectation.”
He said About 2.1 million U.S. jobs will be lost in 2009, with 80% of the layoffs by July. (2.2 million jobs were lost in the US in 2008).
“The downside risks facing the U.S. economy dwarf the upside potential that exists,” Lonski said.
US economists are looking for another week with first up job claims topping the half a million mark when the report comes Thursday, US time.
Not helping in the US is the continuing fall in industrial production which fell by a bigger-than-expected 2% in December
US economists had expected a 1% decline in December after a revised 1.3% drop in November, initially reported as a fall of just 0.6%.
The US Federal Reserve said that for the 4th quarter as a whole, total industrial production fell at an 11.5% annual rate. Compared with December 2007, industrial production was down 7.8%, the biggest drop since September 1975.
The Fed said output declines were "widespread." Among major market groups, only business equipment increased in December, and that was largely due to a surge in commercial aircraft production following a labour strike.
The Fed said capacity utilization fell to 73.6%, which is 7.4 percentage points below its average level from 1972 to 2007 and another real sign of the depth of the slump. With orders for industry falling, that’s bad news for both earnings and jobs in coming months.
Retail sales are still falling, consumer credit is slumping and orders for both durable and non-durable goods are sliding in response to the slumping level of demand from consumers and business alike.
It means there’s no way business and consumers can take advantage of the sharp slide in inflation, which in normal times would be very good news.
The fall in oil prices and the slump in the economy are helping drive prices lower.
Figures out Friday showed that US consumer prices fell in December for the third straight month, with plunging energy costs contributing to the decline.
The Consumer Price Index declined a seasonally adjusted 0.7% from November.
The fall in December was smaller than the 1.7% fall in November.
The US Labor Department said that left the CPI just 0.1% up over all of 2008, the smallest rise since 1954!
Other figures showed (like here in Australia) a small rise in US consumer confidence.
It rose slightly in January but remained at comparatively depressed levels, with continued expectations of a deep and long recession.
The Reuters/University of Michigan Surveys of Consumers said its preliminary index reading of confidence for January rose to 61.9 from December’s 60.1.
We will find out here this week if the small rises we have seen late last year in confidence levels, have continued into this month with rates down and signs of a reasonable Christmas-New Year period.
