More layoffs coming as market crashes

“I’m having trouble now remembering the last good data point,” says Uri Landesman. He’s not the only one.

Landesman, president of New York’s Platinum Partners, tells Reuters this week that numbers on Wall Street and on the international markets are continuing to disappoint. Is it that much of a surprise though?

The SP 500 showed a negative trend for the year on Tuesday, the same day the Dow Jones Industrial Average dropped 2.19 percent, an eighth consecutive day of decline for the DJIA. The Dow is currently at a low point that it hasn’t seen since 2009.

Wednesdays’ reporting from Reuters reveals that the US services sector fell last month to its lowest level since February 2010 as well. A weak demand for transportation equipment in June yielded a drop in new US factory orders, which only adds to last week’s statistics showing that both American manufacturing and the gross domestic product itself are at a two year low. While consumer spending went up as of late, it showed only an increase of 0.1 percent for last quarter.

Figures released last week by the Institute for Supply Management showed that manufacturing in the States barely saw any increase at all in July, with international manufacturing also showing staggering statistics.A report released today by consultants Challenger, Gray Christmas, Inc. add that plans for job cuts announced in July went up more than 60 percent from June’s figures. Additionally, job cuts in July show the largest amount of monthly lay-offs since March 2010.

“What may be most worrisome about the July surge is that the heaviest layoffs occurred in industries that, until now, have enjoyed relatively low job-cut levels,” John A. Challenger, chief executive officer of Challenger, Gray Christmas, says in a statement.

“A casual observer certainly might conclude that the wheels just fell off the recovery wagon,” adds Challenger.

On Friday this week, the US government will release July’s unemployment figures, which while is expected to show a well-welcomed surprise of slight job creation, the 85,000 positions added last month will not be enough to see the unemployment rate drop below 9.2 percent.

With American unemployment still showing signs of trouble, someone in the meantime is benefiting: MasterCard Inc showed a second-quarter profit increase of 33 percent in credit card transactions and revenue.

Leave a comment