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CNN Live Saturday
Job Cuts Are on the Rise
Aired July 28, 2001 - 13:03 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
DONNA KELLEY, CNN ANCHOR: Job cuts and layoffs are the most visible sign that the economy is at its lowest growth in eight years. Yet consumer spending continues to keep the economy afloat, and the rising unemployment rate is offset by new jobs in some cases. And while this can make the overall economic picture encouraging, it's small consolation to those who have already lost a steady paycheck. Tim O'Brien of CNN Financial News has our report.
(BEGIN VIDEOTAPE)
TIM O'BRIEN, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): Justin Sweetman and Jennifer Jordan, who worked together at a startup software company in Northern Virginia, both got pink slips last April.
JUSTIN SWEETMAN, LAID OFF WORKER: By 4:00, we were all out the door.
O'BRIEN: Life hasn't been the same since.
JENNIFER JORDAN, LAID OFF WORKER: We had kind of thought that the company was starting to get on rocky ground, so you know, I was able to tighten my belt a little bit beforehand. So, I did have some savings to dip into.
O'BRIEN: Justin and Jennifer are hardly alone. Over the last several weeks, there have been waves of layoffs from company after company, all reeling from declining profits. Yet consumer confidence and spending have been keeping the economy afloat.
ALAN GREENSPAN, FEDERAL RESERVE CHAIRMAN: What is really quite remarkable is that the economy is still standing.
O'BRIEN: Although unemployment is rising, the current 4.5 percent rate is actually lower than the average over the last 10 years. And the economy, although clearly sluggish, is creating jobs almost as fast as it's losing them.
RON BIRD, EMPLOYMENT POLICY FOUNDATION: Half of the people who face unemployment today are finding a new job still within about six weeks. Secondly, we have a much larger proportion of households with multiple incomes, with dual incomes. So that if one person does face an interruption in employment, there is still another source of income in the household. O'BRIEN: Add to that the availability of home equity loans, unemployment benefits and severance pay. All can allow some consumers to keep spending long after they've stopped getting paychecks. But consumer confidence cannot sustain a weak economy forever.
SWEETMAN: My optimism is rapidly receding, and I'm now actually kind of going, what am I going to do next?
O'BRIEN: Justin Sweetman and Jennifer Jordan have stopped pouring money into the economy as they used to. This weekend, they'll go kayaking down the nearby Potomac River. Plans for a more expensive camping trip out West on hold for now.
Tim O'Brien, CNN Financial News, Washington
(END VIDEOTAPE)
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