Riskon in the News

October 19, 2001
Jobless data, new layoffs suggest worsening outlook

The lines grew longer at U.S. state unemployment benefit offices last week, a government report showed Thursday, with more workers ending up jobless and remaining that way in an economy hit hard by the Sept. 11 terrorist attacks.

The Labor Department said the number of initial jobless claims increased by 6,000 to a seasonally adjusted 490,000 for the week ended Oct. 13, above Wall Street's expectations.

“The level is just slowly creeping upward to a pretty severe recession level,” said Kurt Karl, chief economist at Swiss Re in New York.

The more stable four-week moving average of jobless claims climbed for 491,250, its highest level since April 6, 1991.

Adding to the woes, Wall Street brokerages and top telecom firms announced layoffs.

Merrill Lynch and Co. said it cut 2,300 jobs in the third quarter on top of the 3,800 cuts announced for the first half.  Bear, Stearns and Co. said it would trim 7 percent of its workforce.

BellSouth Corp, the third largest local U.S. telephone firm, said Thursday it would shed 3,000 jobs, the day after long-distance giant Sprint Corp. unveiled plans to cut 6,000.

Nearly 700,000 job cuts have been announced in recent months by companies around the world.  One estimate puts U.S. layoff announcements since Sept. 11 at 467,000.

“In terms of the overall job markets, particularly in the financial sector, this is as bad as we have ever seen it in terms of raw numbers of cuts,” said Barry Honig, president of Riskon, Inc., an executive search firm.