Help Wanted: Mass Layoffs Increase Strain on American Economy

As if a housing crisis and global market meltdown aren't bad enough, layoffs are rising too: September was the worst month for "mass" layoffs since 2001, the WSJ reports.

And the hits just kept coming in October:

"In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who's Who of corporate America," the NY Times reports: "Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines."

The good news for investors is that stocks typically bottom long before the economy and unemployment turn a corner. The bad news is rising joblessness and its impact on the real economy -- most notably housing and consumer spending -- may just be getting started.

Economists are now debating how high unemployment will rise from its still relatively low 6.1%. Among the milestones currently being targeted:

* Recent peak of 6.3% in June 2003 (seems like a lock)
* Early 1990's recession peak of 7.8% (likely)
* Late 1982 recession peak of 10.8% (extreme, but not unthinkable)
* Great Depression 25% (unthinkable)

At this point the best hope for jobs growth appears to be a massive program of fiscal spending by the Federal government, regardless of who wins the election. That isn't what champions of free-market capitalism want to hear but their complaints are likely to fall on deaf ears as private corporations continue to shed jobs.