Political Intersection

According to the Washington Post, American companies announced job cuts totaling 45,000 this morning, as the global downturn slammed the profits of exporters like Caterpillar and a domestic recession hit hard at retailer Home Depot. As companies begin announcing their financial results for the end of 2008, they are also moving fast to cut costs in response to poor results and a diminished outlook for the coming year.

The job cuts announced so far today include 20,000 at heavy equipment maker Caterpillar, 8,000 at the Sprint Nextel telecommunications company, 7,000 at Home Depot, and 8,000 anticipated from the pending merger of the Pfizer and Wyeth pharmaceutical companies.
It is not immediately clear how many of the job reductions will involve layoffs of U.S. workers, how many will come through attrition or other voluntary departures, and how many may involve positions overseas.

But the combined news adds to the impression of a U.S. labor market facing serious pressure, as businesses scale back payrolls in response to a recession that has hit the world’s major economies simultaneously. The slowdown has sparked protests in Eastern Europe, led cautious European bankers to slash interest rates, prompted Asian governments to increase public spending, and caused corporations worldwide to reduce employment.
Netherlands bank ING said this morning it was cutting 7,000 jobs, while electronics maker Philips said it was eliminating 6,000 positions.

U.S. unemployment currently stands at 7.2 percent, but politicians and economic analysts have projected the number could reach double digits before the economy recovers. The Obama administration has proposed a major economic stimulus package in response. The president has already made remarks this morning via a televised press conference.