Weakening demand is forcing new and
accelerated cost reductions at companies from Bank of America
Corp. and Hewlett-Packard Co. (HPQ) to Staples Inc. (SPLS) and Eastman Kodak
Co. (EKDKQ), dimming the outlook for an already struggling U.S. labor
market.
Even as consumer confidence and housing show signs of recovering, sales for businesses in the Standard & Poor’s 500 Index fell 0.9 percent from a year earlier in July through September, the second consecutive quarterly drop and biggest decline since 2009, according to analyst forecasts compiled by Bloomberg. A 1.2 percent gain projected for October-December still is smaller than the 5.4 percent rise in this year’s first three months.
A global slowdown triggered by Europe’s debt crisis is exacerbated by the potential impact of the impending U.S. fiscal cliff of changes in taxes and government spending. All this is pushing finance chiefs back to the drawing board, with some limiting hiring and investment and others slashing more jobs than originally announced. Such belt-tightening will dominate employment prospects for the rest of the year.
“These cost controls are one of the key reasons job growth remains relatively weak,” said Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, New Jersey, and former head of monetary analysis at the Federal Reserve Bank of New York. Companies will avoid hiring until orders have strengthened and “they cannot meet demand with their existing workforce.”
Read more: http://www.bloomberg.com/news/2012-09-30/jobs-outlook-seen-weak-as-u-s-companies-see-need-for-cost-cuts.html
Even as consumer confidence and housing show signs of recovering, sales for businesses in the Standard & Poor’s 500 Index fell 0.9 percent from a year earlier in July through September, the second consecutive quarterly drop and biggest decline since 2009, according to analyst forecasts compiled by Bloomberg. A 1.2 percent gain projected for October-December still is smaller than the 5.4 percent rise in this year’s first three months.
A global slowdown triggered by Europe’s debt crisis is exacerbated by the potential impact of the impending U.S. fiscal cliff of changes in taxes and government spending. All this is pushing finance chiefs back to the drawing board, with some limiting hiring and investment and others slashing more jobs than originally announced. Such belt-tightening will dominate employment prospects for the rest of the year.
“These cost controls are one of the key reasons job growth remains relatively weak,” said Charles Lieberman, chief investment officer at Advisors Capital Management LLC in Hasbrouck Heights, New Jersey, and former head of monetary analysis at the Federal Reserve Bank of New York. Companies will avoid hiring until orders have strengthened and “they cannot meet demand with their existing workforce.”
Read more: http://www.bloomberg.com/news/2012-09-30/jobs-outlook-seen-weak-as-u-s-companies-see-need-for-cost-cuts.html
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