Outlook For Job Seekers Not Promising

While the job market has been pretty tough over the last three years, there's evidence it is getting even tougher.

In Washington this week, Federal Reserve Chairman Ben Bernanke warned the economic recovery is in danger of faltering. In testimoney before Congress, Bernanke noted the “Occupy Wall Street” protests in New York, aimed at the nation's financial sector, were understandable.

"Certainly, nine percent unemployment and very slow growth is not a very good situation," Bernanke said.

More jobless knocking on doors

The situation may be about to get worse. The outplacement firm Challenger, Gray & Christmas reports that U.S. employers announced plans to layoff 115,730 employees in September, making it the worst month for job losses since April 2009, just before the economy began its feeble recovery.

A big cut in military spending accounts for some of the layoffs. Bank of America is also shedding employees to stem the flow of red ink. As Congress is now obligated by law to reduce the deficit by the end of the year, there are likely cuts in government spending ahead, which could translate into the loss of government jobs and positions at private companies that depend on government contracts.

Triple-digit increases

September job cuts were 126 percent higher than the 51,114 announced in August, according to the Challenger report. They were 212 percent higher than September 2010, when employers announced just 37,151 job cuts.

The September surge brought the number of job cuts announced in the third quarter to 233,258, the highest quarterly toll since the third quarter of 2009. That figure is up 103 percent from the previous quarter and 105 percent higher than the same quarter a year ago.

To date, U.S.-based employers have announced 479,064 planned layoffs in 2011, a 16.5 percent jump from the same point last year, when job cuts totaled 411,272. One-third of the layoffs announced this year came from government employers. It is, by far, the largest job-cutting sector, with 159,588 announced job cuts to date.

Maybe not as bad as it seems

Despite the sobering numbers, John Challenger, chief executive officer of Challenger, Gray & Christmas, says it's important to keep them in perspective.

“It would be easy to look at the September job-cut figure alongside some of the other less-than-stellar economic news that has been reported lately and draw the conclusion that the economy is indeed headed for a double dip,” Challenger said. “However, it is important to keep in mind that 80,000 cuts, or nearly 70 percent of last month’s total, came from just two organizations: Bank of America and the United States Army.”

Neither of these cuts, he says, is directly related to a softness in the economy.