The U.S. economy shed more jobs in September than it has in any month in the past seven years, as corporate hiring plans have apparently come to a virtual standstill due to the worsening credit crunch.
About 231,000 jobs were lost in September, according to TrimTabs Investment Research, which bases its estimates on daily tax-flow data.
That registers as the largest single-month loss since November 2001, and also accounts for more than 25 percent of the 974,000 total jobs that TrimTabs calculates the U.S. economy has lost so far in 2008.
Roughly 50,000 of the job cuts this month were connected to the hurricanes that hit the Gulf Coast. “But the rest of the carnage is from the meltdown in the financial markets and the ongoing credit crisis,” said Madeline Schnapp, director of macroeconomic research at TrimTabs.
She added that weekly unemployment claims spiked last week, bringing the total number of claims for September to 493,000, the highest levels since September 2001.
While the job picture is already bleak, Schnapp noted that many companies have also elected to shelve any hiring initiatives for the moment. With the credit markets essentially seizing up in recent weeks, corporate hiring managers are almost exclusively focused on having enough cash on hand to cover their payroll expenses.
“Corporate hiring managers are very much operating in fear mode right now,” she said. “They’re acting defensively, and preservation of existing capital is the name of the game. They don’t want to spend on any new hires until there’s more clarity in the credit markets.”