Companies slashed thousands of jobs in February, creating the steepest plunge of payrolls since two months after the Sept. 11 attacks, according to the U.S. Labor Department. Fear of war and other uncertainties created by geopolitical risks are said to have contributed to the discouraging numbers.
According to a Labor Department report released Friday, the unemployment rate edged up to 5.8 percent in February after dropping in January. Furthermore, employers have cut 308,000 non-agricultural jobs, which included jobs in various industries, ranging from services production to construction positions.
Lynne Sebille-White, assistant director of the University’s Career Center, said job postings by consulting, investment banking, marketing and advertising have been down this year, while only government and non-profit firms are hiring at a steady rate.
“Certainly we still have people recruiting on campus, students are receiving offers, but it is not at the same rate that it was two or three years ago,” White said.
College students, especially graduating seniors who are about to enter the job market, are significantly impacted by the job cuts because they now have to compete with more experienced workers that have been recently laid off.
“The job agent in New York City told me that I have to demonstrate the very best work in order to get a job because of the current economic situation and massive lay offs,” Art and Design senior Joanne Liu said.
The dismal job market outlook and the weakness in the stock market have started to worry economists as these numbers are suggesting a slower than expected recovery pace.
In order to further stimulate spending and investment, some analysts on Wall Street are predicting that the Federal Reserve will cut the short term interest rate by a quarter-point again in Wednesday’s up-coming meeting.
“The figures are telling us that the economic expansion is plodding along at a very slow rate right now,” said Saul Hymans, director of the University’s Research Seminar in Quantitative Economics.
Hymans said Americans are extremely cautious with their spending when economic fears are generated by the uncertainties created by war-related issues.
“Households and businesses are too jumpy and jittery to make heavy investment decisions, whether these decisions are buying cars or investing capital … all these things are scary things to do if you are not sure what things are going to be like in the economy in the future,” he said.
But Hymans added that once the geopolitical risks are cleared, the great growth potential of the world’s largest economy will start to pick up within months.
“When you think about everything that has hit the economy negatively hard over the past year or more and the economy’s still managing to grow, even only by a little bit, that means we have a very resilient economy,” Hymans said.
Students said they hope the economy will improve soon and thus will give them a bigger chance of landing a career when they graduate.