10% unemployment soon Commentary: 3 key sectors show just how weak job market is

[hvactec]

ROCKVILLE, Md. — After the nationwide unemployment rate peaked above 10% in late 2009, we saw a fairly rapid decline in jobless rolls during the next 12 months. By March of this year, the headline jobless number had crept back under 9% and renewed optimism in the economic recovery and equity markets.
Jeff Reeves is editor of InvestorPlace.com.
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Well, we’ve been reading a much different story in the last month or two, with disappointing job creation and a rise in the overall unemployment rate as the meager number of new positions can’t keep up with the sheer volume of folks looking for work.

To make matters worse, we are now seeing a disturbing new spate of layoff announcements — not just a dozen or so workers here and there, but pink slips issued by the thousands at some of the biggest blue chips on Wall Street. Read about 6,500 jobs cut at Cisco.

In short, there aren’t enough jobs to go around now and there will be even fewer jobs a few months down the road. All this points to significantly higher unemployment in the near future, possibly over the 10% mark.

So where will the biggest damage be done? I think these three sectors top the list:
Financial sector layoffs

At the end of June, Goldman Sachs GS +1.77% warned that 230 jobs could be on the chopping block between late September and March 31, 2012. But Goldman’s labor pool should consider itself lucky. Barclays BCS +9.65% announced it will lay off “several hundred” workers this month in addition to the 600 that already were laid off in January. And perhaps most jarring, rumors circulated last week that UBS UBS +3.89% is set to cut around 5,000 jobs while rival Credit Suisse CS +5.63% is planning to axe about 1,000 staffers.

And that’s not counting possible forthcoming layoffs we haven’t had confirmed or leaked. Struggling financial stock Bank of America BAC +3.85% surely cannot sustain its work force of nearly 290,000 for much longer without some cost-cutting. Revenue is stagnant, B. of A. stock is in the toilet with a 22% loss year to date and the light at the end of the tunnel isn’t close when it comes to the bank’s balance sheet. Read about 5 big banks going bust on InvestorPlace.com.

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[waltky]

As more older people continue working, fewer jobs for younger set...

A jobs pinch for the ages
21 July`11 - As older workers stay in place, younger aspirants struggle to break in

Roxane Larouche, 64, an operating room nurse at Beth Israel Deaconess Medical Center, is just a year away from official retirement age, but has no plans to leave her job anytime soon. Since her younger husband changed careers during the recession and returned to school to become a pharmacist, the couple has relied on their savings and Larouche’s income. “There are many people who continue to work into their 80s,’’ Larouche said. “I’m not saying that’s what I would do, but I want to work as long as I’m physically able.’’

Larouche is among a growing number of older Americans who are working past their traditional retirement age, and in doing so, reducing opportunities for younger workers in a difficult job market, according to a study by Commonwealth Corp., the state’s quasi-public workforce development agency. Since the recession began at the end of 2007, workers age 55 and older were the only group to increase participation in the US workforce; meanwhile, participation rates among workers under 25 declined sharply.

The number of working US residents age 55 and up expanded by 2 million, or nearly 8 percent, between December 2007 and December 2010, while the number of younger workers, ages 16 to 24, fell by nearly 3 million, or about 13 percent, according to the study, which analyzed Labor Department data. Employment among 25- to 54-year-old workers also fell, by 6.5 million, or about 6.5 percent. Massachusetts has an older population that is proportionally larger and faster growing than the nation’s as a whole, which could put additional pressure on younger workers here, according to the study.

“The slow recovery has meant it has been really difficult for younger workers to get a foothold,’’ said Nancy Snyder, president of Commonwealth Corp. “Younger workers are being disproportionately impacted.’’ The state unemployment rate last year was 8.9 percent for workers under 55, compared with 7 percent for older workers. The labor force participation rate in the state among workers 55 and older rose to nearly 43 percent in 2010, from 40.5 percent in 2007, while the participation rate among those under 55 fell slightly, according to the study.

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