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As many as a million American jobs could be lost every month by next spring as businesses struggle to raise capital in financial markets consumed by fear, according to a new analysis. November was the worst month in the US labour market since the oil crisis of 1974, as more than 500,000 US workers were laid off, according to official figures released on Friday.
But Graham Turner, of consultancy GFC Economics, says the rising cost of corporate debt is now flashing a red warning signal that far worse is to come over the next few months and job losses are heading for levels last seen in the 1930s Great Depression.
Corporate bond yields have rocketed since the credit crisis began as investors flee risky assets in search of safe havens such as US Treasuries. That effectively means many firms are being forced to pay eye-watering interest rates to borrow funds.
Grim Job Report 'Not Showing Full Picture'
As bad as the headline numbers in Friday’s employment report were, they still made the job market look better than it really is.
The unemployment rate reached its highest point since 1993, and overall employment fell by more than a half million jobs. Yet that was just the beginning. Thanks to the vagaries of the way that the government’s best-known jobs statistics are calculated, they have overlooked many workers who have been deeply affected by the current recession.
The number of people out of the labor force — meaning that they were neither working nor looking for work and that the government did not consider them unemployed — jumped by 637,000 last month, the Labor Department said. The number of part-time workers who said they wanted full-time work — all counted as fully employed — rose by an additional 621,000. Take these people into account, and the job market may be in its worst condition since the early 1980s. It is still deteriorating rapidly, too.
Originally posted by stumason
If I was a CEO or business owner,
I'd put say 25% of the company profits aside to act as a reserve every year.
It seems clear that not one of these big hitters who needs Government bailouts has done so, nor has any other business for that matter.
Geez, I thought we were paying all these killer high executives the big bucks cuz they were so talented.
... I'd rather take a lower dividend if the company put aside some money for the future.
If I was a CEO or business owner, I'd put say 25% of the company profits aside to act as a reserve every year....