06 February 2009 21:38 [Source: ICIS news]
WASHINGTON (ICIS news)--Major job losses in the ?xml:namespace>
Kevin Swift, chief economist at the American Chemistry Council (ACC), noted that with yet another wave of job losses announced earlier on Friday, “it is not a good situation out there” in the broad US economy.
“The nearly 600,000 job losses in January that were announced today were well above expectations,” Swift noted.
“And for consumers, this will play against consumer confidence. If people are afraid their jobs might be affected, that affects their spending, and we’re seeing that now. Consumer spending was weak in December. Consumers are skittish and they’re cutting back.”
Consumer spending is the principal driver of the
Swift said that job losses in the chemicals sector have been severe, with about 22,000 chemical industry jobs gone in the last year. “As a percentage of the workforce, that’s a larger drop than in the economy as a whole,” he said.
However, Swift said he thinks that the employment blood-letting is pretty much over.
“We saw the large layoff announcements by some large companies in December, and those reflected the awful conditions in the fourth quarter,” he said. “But I don’t know that we’ll see a lot of job cuts going forward now. The announcements of layoffs certainly have tapered off since December.”
Swift said there may well be some additional and incremental job reductions in the months ahead but that he does not expect any more major layoffs.
Indeed, there may be the first whispers of a recovery ahead, he suggested.
“Look at thermal plastics,” Swift said. “We’re selling about 4.5bn lbs of thermal plastics per month, and we know that our customers are consuming about 5.4bn lbs per month.”
“So they are drawing down inventories of plastics in silos and hopper cars to the tune of about 900m lbs per month,” he said, adding: “Eventually they’re going to run out of inventory, and there will be a boost as customers start ordering again.”
Swift also sees slim but positive gains in key indicators. The Conference Board’s index of leading economic indicators saw a slight improvement in December and the rates charged for ocean-going cargoes of dry bulk commodities have begun to increase.
He gave particular emphasis to the Baltic Dry Index, the London-based daily assessment of cargo shipping rates worldwide for such bulk dry commodities as iron ore and rice.
“The Baltic Dry Index has been improving, and this suggests a possible rebound of global trends,” Swift said.
The ACC economist said more definitive signs of an economic recovery might be seen in two more monthly gains in the Conference Board’s leading indicators index, increases in world prices for oil and copper and an uptick in the weekly
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