Jobs Market Growth? 1,422 Mass Layoffs Took Place in February 2013

The so-called “recovery” in the jobs market isn’t sustainable. I don’t disagree that there has been job creation in the past few months, but when I look at the spectrum of the jobs created in the U.S. economy, I become skeptical. Jobs growth in the U.S. economy has been in the low-paying retail sector.

Consider this: in February, there were 1,422 mass layoffs in the U.S. economy, involving 135,468 workers. Looking closely at the layoffs, 295 of them occurred in the manufacturing sector, sending 39,407 individuals back to look for jobs and seek unemployment insurance benefits. (Source: Bureau of Labor Statistics, March 22, 2013.)

There are more than five million Americans working part-time, not because they want to, but because they can’t find a full-time job. (Source: Federal Reserve Bank of St. Louis web site, last accessed March 26, 2013.)

What’s ahead for the U.S. jobs market? As curt as it sounds, more misery is in store for the U.S. jobs market. Hewlett-Packard Company (NYSE/HPQ) says it will cut 15,000 more jobs—part of a three-year layoff plan that will decrease its workforce by 29,000. (Source: Business Insider, February 27, 2013.) And Hewlett-Packard (HP) is not the only company that’s downsizing and sending its employees back to the jobs market; some of the other major companies are doing the same.


Why is corporate America laying off workers? The answer is simple: its corporate earnings are suffering, and the only way companies can drastically make a difference when revenue is soft is to cut expenses; this will lead to more pressure on the U.S. jobs market. In the first quarter of this year, corporate earnings growth is expected to contract.

At present, we have 12 million individuals looking for work in the U.S. jobs market with a significant portion of those people unemployed for longer than six months.

Where the Market Stands; Where It’s Headed:

Trading has become choppy, with the Dow Jones Industrial Average up one day and down the next. This type of trading, after a long period of rising stock prices, is often indicative of a turn in market direction. I continue my bearish stance on stocks. The market is severely overbought and overvalued.

What He Said:

“Interest rates at a 40-year low: The Fed has made borrowing as easy as possible, resulting in a huge appetite for loans and mortgages. We are nearing a debt crisis.” Michael Lombardi in Profit Confidential, April 8, 2004. Michael first started warning about the negative repercussions of then-Federal Reserve Governor Greenspan’s low interest rate policy when the Fed first dropped interest rates to one percent in 2004.