Economic Downturn Equals Layoffs

The economy appears to be in a downward spiral. The government reported a jump in first-time unemployment claims Thursday. Goldman Sachs, Xerox and other companies announced this week that they are cutting thousands more workers.

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RENEE MONTAGNE, Host:

And Steve the latest news from the U.S. job market is adding to the gloom. A weekly report on first-time unemployment claims out yesterday, showed a big jump. There were also more pink slips from big name companies. NPR's Wendy Kaufman has more.

WENDY KAUFMAN: The Wall Street banking giant Goldman Sachs said it would lay off about 3,300 workers, about 10 percent of its current employee base. In the pharmaceutical industry, Merck announced layoffs of more than 7,000 or 12 percent of its workers. And at Xerox 3,000 jobs will be eliminated. At the struggling U.S. automakers, there will be additional cuts including those of white-collar workers. This week's layoff numbers are big, but economist Ali Tarhouni of the Foster School of Business at the University of Washington suggest the layoffs at the big firms are just the tip of the iceberg.

KAUFMAN: I think that the real concern is we get to the small or medium size, because that's basically what the economy is. And that's when we start seeing numbers of unemployment going up and going up rapidly.

KAUFMAN: The nation's unemployment rate now stands at 6.1 percent and as the economy continues to slow, experts believe the rate will rise to around eight percent within the next year or two. Wendy Kaufman, NPR News.

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