Massive U.S. job cuts unfolding in October

WASHINGTON, Oct. 26 (UPI) -- A massive wave of job layoffs is hitting the struggling U.S. economy, with October's total of lost jobs expected to be around 200,000, economists say.

When new numbers are announced three days after the Nov. 4 U.S. presidential elections, the nation could be looking at a significantly higher unemployment rate, well up from the current 6.1 percent level as the financial crisis moves to a new phase, The New York Times reported Sunday.

"My view is that it will be near 8 or 8.5 percent by the end of next year," Nigel Gault, chief domestic economist at Global Insight, told the newspaper. That figure would be the highest since the deep recession of the early 1980s, The Times said.

In recent weeks, layoffs have been announced by all the Detroit automakers and most U.S. airlines, along with such usually reliable employers as Merck, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa and Coca-Cola.

"People have grown very nervous," Harry Holzer, a labor economist at Georgetown University, said. "They have seen a lot of their wealth wiped out and as they cut back their spending, companies are responding with layoffs, which hurts consumption even more."