Another Reason the Current Crisis is Going to Hurt

"Consumer spending accounts for more than two-thirds of the U.S. economy," is a quote from an article by David Lazarus in the LA Times.

U.S. retail sales fell in September for the third straight month -- the first time this has happened since the government started tracking such data in 1992. The holiday shopping season is expected to be the worst in years. But some forecasters are predicting that spending will pick up by the middle of next year as consumers shake off the recession blues.

Now is the time to consider how well our factories and workshops have been capacitized. With orders declining how will production be reduced? Will an expensive large integrated line have to be run for one shift a few days a week? Or, will is be run with fewer employees to meet the new output requirement?

Job Loses on the Rise

The New York Times has another article about the downward trend in employment. You have to do a free registration to read the article. I think all of us working in production already know. Some of us are watching as layoffs occur.

As the financial crisis cuts demand for American goods and services, the workers who produce them are losing their jobs by the tens of thousands.

Some industries have been hit hard and fast; heavy appliances, automobiles, expensive consumer goods like TVs.

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: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.

With the current mood I am sure we have not seen the bottom of the tightening yet. So factories will continue to see lack of work.