2008: ONE MILLION LAYOFFS, AS PAYROLLS PROBABLY FELL BY 200,000 IN OCTOBER. By Bob Willis
Nov. 2 (Bloomberg) -- U.S. employers probably eliminated jobs in October for a 10th consecutive month, while manufacturing contracted at the fastest pace since the 2001 recession, economists said before reports this week. Payrolls shrank by 200,000 workers, according to the median estimate of economists surveyed by Bloomberg News before the Labor Department's report on Nov. 7. The unemployment rate may jump to its highest level in more than five years. ``It should be another lousy report,'' said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. ``This'll be another nail in the consumer's coffin.'' The loss of almost one million jobs, falling property values, slumping stocks and frozen credit may cause consumers and businesses to keep retrenching. The state of the economy gave Democrat Barack Obama a lift over Republican rival John McCain as Americans, who will elect a new president in two days, perceived the Democrat from Illinois had a better grasp of the issue. The projected drop in payrolls would be the biggest in five years and follow a decline of 159,000 in September. Factories probably cut 62,000 workers from payrolls, according to the survey median. The jobless rate last month probably rose to 6.3 percent from 6.1 percent in September, the survey also showed. ``Unemployment is likely to rise sharply over the next several months as repercussions from the credit crisis ripple through the economy,'' said Russell Price, senior economist at H&R Block Financial Advisors in Detroit. ``The economy is the most important issue on the minds of voters.'' ECONOMY, ELECTION The report will be released three days after Americans choose between Obama and McCain. The faltering economy and imploding financial markets helped push Obama ahead of McCain of Arizona in polling in key battleground states in recent weeks. On the question of which candidate they trust most on the economy, voters in Florida picked Obama over McCain by a 9-point margin, and in Ohio, the Democrat led by 12 points, according to a Bloomberg/Los Angeles Times poll issued last week. Manufacturing, which accounts for about 12 percent of the economy, probably shrank for a seventh time in nine months, the Institute for Supply Management's factory index may show tomorrow. The gauge probably fell to 41.5, the lowest level since October 2001, from 43.5 the prior month, according to economists polled. A reading less than 50 signals contraction. ``Downside risks to growth remain,'' the Federal Reserve said last week as it lowered its key rate by a half point to 1 percent. ``Business equipment spending and industrial production have weakened in recent months, and slowing economic activity in many foreign economies is damping the prospects for U.S. exports.'' AUTOMAKERS Automobile and car-parts makers are leading the downturn in manufacturing. ArvinMeritor Inc., a Troy, Michigan-based maker of auto and commercial-truck parts, said last week it's cutting 1,250 jobs. ``Swift and decisive actions are necessary in response to today's global economic conditions,'' Chief Executive Officer Charles ``Chip'' McClure said in a statement. Service industries, which range from homebuilders to mortgage lenders, retailers and restaurants, and account for almost 90 percent of the economy, also probably contracted in October, economists forecast another report from the Institute for Supply Management will show on Nov. 5. The group's non-manufacturing index fell to 47.2 last month from 50.2 in September, according to the median of economists' forecasts in a Bloomberg survey. The economy shrank at a 0.3 percent pace in the third quarter, with consumer spending dropping by 3.1 percent, the biggest decline since 1980, the Commerce Department reported last week. Business investment in equipment and software fell at a 5.5 percent rate. Economists surveyed by Bloomberg forecast the economy will contract at a 0.8 percent rate in the fourth quarter. --~--~---------~--~----~------------~-------~--~----~ Thanks for being part of "PoliticalForum" at Google Groups. For options & help see http://groups.google.com/group/PoliticalForum * Visit our other community at http://www.PoliticalForum.com/ * It's active and moderated. Register and vote in our polls. * Read the latest breaking news, and more. -~----------~----~----~----~------~----~------~--~---
