Today's Lead Story: "Gloom" From "Awful Sales Numbers" Means Plummeting Economy
Triggered by the latest "awful sales numbers" from the three major U.S. automakers, economics reporter Peter Goodman filed the Times' Wednesday lead story on the lousy economy: "Deepening Cycle of Job Loss Seen Lasting Into '09 - Weak Signals Persist - 'Slow-Motion Recession' - Latest Auto Sales Add to Gloom."
As automakers dropped their latest batch of awful sales numbers on the market on Tuesday, reinforcing the gloom spreading across the economy, the troubles confronting American workers seemed to intensify.
Plummeting home prices have in recent months eliminated jobs for hundreds of thousands of people, from bankers and real estate agents to construction workers and furniture manufacturers. Tighter lending standards imposed by banks in the wake of huge mortgage losses have made it hard for many Americans to secure credit - the lifeblood of expansion in recent years - crimping the appetite of consumers, whose spending amounts to 70 percent of the economy.
Joblessness has accelerated, and employers have slashed working hours even for those on their payrolls, shrinking the size of paychecks just as workers need them the most.
Now, add to that unsavory mix the word from automakers that sales plunged in June - by 28 percent for Ford, 21 percent for Toyota and 18 percent for General Motors - a sharp sign that consumers are pulling back, making manufacturers more likely to cut production and impose more layoffs. Until recently, the weak labor market has been marked more by the reluctance of employers to create new jobs than by mass layoffs.
With job losses growing and working hours shrinking, many paychecks are eroding, prompting millions of families to cut their spending. Soaring prices for food and gasoline are overwhelming modest wage gains for most workers, leaving households with even less money to spend. All of which deprives struggling businesses of sales, prompting them to shed more workers, sending the cycle down another turn. Starbucks announced on Tuesday that it would close stores and eliminate up to 12,000 jobs, about 7 percent of its work force.
The jump page featured a graph headlined "Gloomy Prospects," which reminded readers "that more layoffs could be ahead."