Effects of recession expected to cut even deeper

Washington Post

WASHINGTON — Recessions can be notoriously uneven. They can wreak havoc with the livelihood of factory workers but not that of bank tellers or nurses. Whole industries can see jobs washed away forever, while others hum along and even grow.

This time, however, the pain is more widespread, economists say, affecting the investment banker, the auto worker, the warehouse manager and the toy store clerk.

So far this year, companies have announced layoffs that affect more than 1 million jobs, according to jobs placement firm Challenger, Gray & Christmas. Bank of America, the Dow Chemical Company, Anheuser-Busch Inbev, General Motors and Circuit City are among the growing number of companies that are letting people go.

Another key difference with past recessions has been the downturn’s “serial nature,” said Jerry Nickelsburg, an economist with the UCLA Anderson School of Management.

In other words, the recession did not affect industries and regions at once, but rolled out in spurts.

Industries that have seen some of the steepest job losses include construction, financial services, retail and manufacturing. The regional differences in job losses reflect how large a role those industries play in a given area’s economy.

In California, for example, a major site of the housing bubble, the construction business began shedding jobs in 2006. The unemployment rate rose to 8.4 percent, according to the Bureau of Labor Statistics. Residential building-related job losses in California had actually begun to slow down this fall, said Nickelsburg. Thanks to the drop in consumer spending, three-quarters of the jobs California lost in November were tied to the retail sector, he said.

Perhaps the region hurting the worst is the industrial Midwest. Michigan, home of the Big Three U.S. automakers, for example, leads the nation in unemployment with a rate of 9.6 percent, BLS data show. The national average is 6.7 percent. The U.S. economy has lost 604,000 manufacturing jobs over the past year, BLS said.

The states that are having a better time weathering the storm benefited from record prices for energy and agricultural commodities earlier this year.