As the financial crisis crimps demand for U.S. goods and services, the workers who produce them are losing their jobs by the tens of thousands.
Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who's Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.
When October's job losses are announced Nov. 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 percent is likely to rise, perhaps significantly.
"My view is that it will be near 8 or 8.5 percent by the end of next year," said Nigel Gault, chief domestic economist at Global Insight, offering a forecast others share. That would be the highest unemployment rate since the deep recession of the early 1980s.
Companies are laying off workers to cut production as struggling consumers scale back spending. Employers had tried for months to cut expenses through hiring freezes and by cutting back hours. That has turned out not to be enough, and with earnings down sharply in the third quarter, corporate America has turned to layoffs.
"People have grown very nervous," said Harry Holzer, a labor economist at Georgetown University and the Urban Institute, tracing cause and effect. "They have seen a lot of their wealth wiped out and as they cut back their spending, companies are responding with layoffs, which hurts consumption even more."
Layoffs are widespread, with Rhode Island the hardest hit.
The broadening layoffs are most pronounced on Wall Street, in the auto industry, in construction, in the airlines and in retailing. Steel mills, big suppliers to many sectors of the economy, are shutting 17 of the nation's 29 blast furnaces - an indicator of how output is declining as corporate America adjusts to the crisis.
In September alone, 2,269 employers each laid off 50 people or more, the Bureau of Labor Statistics reported, up sharply from the spring and summer months, and the highest number since September 2001.
The current unemployment rate, 6.1 percent - up more than a percentage point since April - is still relatively mild by post-World War II standards. The highest level since the Great Depression, 10.8 percent, came in November and December of 1982 as the economy was shaking off a severe recession. The unemployment rate hit 9 percent during the mid 1970s recession, and 7.8 percent in the 1990-91 downturn. The next peak, 6.3 percent, occurred in June 2003, during a long jobless recovery in the aftermath of the 2001 recession.