Chicago mayor warns of “huge layoffs” in a “frightening” economy

Daley said that corporate leaders had told him, “This is going to be all year, so it’s going to be a very frightening economy.” He continued, “Each one tells me what they’re laying off, and they’re going to double that next year. We’re talking huge numbers of permanent layoffs for people in the economy. It’s going to have a huge effect on all businesses.”

Comparing the situation to the Depression years of the 1930s, he said, “We never experienced anything like this except [those] people who came from the Depression. When you have that many layoffs early—and they’re telling me this is only the beginning of their layoffs—that is very frightening.”

Daley also warned that local governments would face bankruptcy and might not be able to meet their payrolls, although he said he was not worried about paying City of Chicago employees.

The Chicago mayor’s remarks coincided with new data and corporate reports that show the US economy is sharply contracting. The Labor Department on Thursday reported that initial claims for unemployment benefits for the week ended November 8 jumped 32,000 to a seasonally adjusted 516,000—a seven-year high and a greater increase than analysts had expected. It was the first time initial jobless claims topped 500,000 during the current slowdown.

The number of individuals continuing to seek unemployment benefits rose to 3.9 million, above analysts’ estimates of 3.85 million and the highest total since January 1983, the period of the previous worst recession since the Great Depression. The increase in continuing claims indicates that laid-off workers are taking longer to find a new job.

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http://wsws.org/articles/2008/nov2008/usec-n14.shtml