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John Challenger of Challenger, Gray & Christmas on the companies shedding jobs in the past month and what it means for the economy.
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You for that let me bring John Challenger in from challenger gray and Christmas -- -- CEO of that -- -- -- his firm yesterday.
He's here in studio with us -- New York could see a -- put a number out as you deal every month on layoffs anybody's.
This big pickup they pick up in layoffs more companies saying especially some of the big ones like HP saying.
What we really need to shed staff and one -- that tell us well these were the previously asked we've seen since September of last year it's certainly -- sign.
That that whole dynamic we're just talking about of job creation slowing.
The then the reverse side company started to shed workers that HP layoff.
Was a big laugh a mega -- we've not seen many of those in some time and often those are harbingers of future things to come big companies beginning to say.
We just can't continue.
With the size of the labor force we've got because for awhile here -- the last however many months a narrative in the labor market as you know has been hey things are getting better maybe not at the pace we wanted but things are.
Steadily improving even in the U six number that overall unemployment rate that we showed -- it's fourteen and half percent but it's been coming down it's over fifteen -- that we do graphic we showed.
It's been coming down are you saying that the risk here.
Is that we're about to take another serious turn for the worse certainly I think that's -- risk right now more -- the downside and upside we've seen two consecutive months now we're job creation numbers have been very light.
Much less and we've come to hope for.
When we had that run from September through February with a job creation was strong and unemployment rate was dropping even with people leaving the workforce right consistently dropping.
Now we're being to say.
Why is this economy flattening out is it about tip over what's going on whether it's a crisis in Europe for the fiscal cliff at the end of the year maybe gas prices which have been.
A little bit better it will moderated lately but maybe -- just pressures now that companies is they start to look into the future late 20122013.
Begin to say.
We're just not very positive about.
What's coming it what do you think it's the announcement source trying to I've mentioned -- too rich a moment ago the idea of the DOD.
Of the employee and what they're thinking and saying helpful have been looking forever and I'm just forget about -- should give up for awhile and this is -- you know -- doll retire early in the new make the most of that are -- you know this all these types of things that people think.
In their mind to what about the employer.
What's the conversation.
Been like do you think in board rooms have you talked a lot of these CEOs and Samir numbers reflect in the surveys that you do what are they talking about right now and how that conversation changed well employers need demand they need to see.
That there.
Revenues are going up sales are coming in they'll hire when they have the need for those people.
They're not gonna get out in front of -- too much and I -- go out and this is key to real job growth and say we're gonna open up a lot of new plants.
We're gonna develop new products and test try those out spend some of the cash and got an.
Take risks you know and hire people in front of the -- buying of those products and services.
That right now there's seem to be moving back in that mode of let me ask these cautious here because we don't know what's gonna happen last time we got caught.
With -- -- not not enough cash we were and some real risky times and so we're hold on -- Smart cash in case that demand is not going to be there.
They -- that hard lesson but then it becomes -- self fulfilling prophecy in the spiral that continues where it what changes that and you start -- yourself -- -- -- -- it's almost like the home.
-- situation right we saw interest rates -- a ten year notes one and a half percent now it's ridiculous.
Yesterday Freddie Mac and that's -- three and point 75% was an average thirty mortgage the people are buying houses because they say to themselves one of the things they say if they don't.
What's the stop those rates from even going down more -- hang out.
Well that is almost the employer is thinking the same thing out this week here and then.
When did they not -- you know this is a sign of an economy that has a lot of debt yeah -- consumers or its government.
-- companies although that may -- up companies quite the same way but a lot of debt so what you do is slowly pay off your debt this is certainly the companies depend on the consumers to spend their dollars and they're not spending and they're saying.
Each month and up a little bit away but right now I'm not gonna take a big risk.
And go out and and spend the way that I used to and Ellis that's two thirds of our economy sure business spending also -- -- go invest a lot of money in new technology equipment that's a big concern we look at what happened with.
Hewlett-Packard those numbers have been pretty strong for some time business spending on their infrastructure but maybe this is also begin to be.
That's obvious -- question the normal question I would ask is what's the trigger that changes that dynamic but it doesn't sound like you think there is one end.
It it's almost like you just subscribing that -- hey we're coming out of financial crisis and these things take a long long time as a writer -- -- some point you know you and hope to see the cycle change -- some trigger.
That pushes cop -- it look like you're getting that way.
As we went the us all that job -- from September to February.
But that doesn't seem to be the case now and we've had now a couple springs where it just seems to happen over over that way the economy starts to get going and we -- gas summer and then something happens.
And it's all the sudden.
Flattens out we'll see what happens here less -- off forty.
Some minutes now John thank you -- gonna see a person but -- I'd be John Challenger from challenger gray.
And Christmas with us.
