Job Cuts Spread Beyond Weakest Sectors

While layoffs at airlines, automakers and financial firms have dominated the headlines, the trend has now "spread throughout much of the economy," according to a report released this week by consultancy Challenger, Gray & Christmas.

The firm, which helps laid off workers find new jobs, says that 17 of the 25 industries it tracks have seen an increase in job cuts compared with last year. That is particularly true for the aerospace and defense industry, where layoffs nearly tripled, as well as the entertainment and leisure industry, where they nearly doubled.

Job cuts in the public sector -- which is traditionally strong even through recessions -- as well as nonprofit agencies and insurance companies also rose by more than 90%.

"We have seen job cuts increase in the majority of industries that we track," says John Challenger, CEO of the firm, "indicating that the downturn, which was isolated to the housing and financial sectors just a few months ago, has spread throughout much of the economy."

Overall layoffs through July have accelerated by 33% compared with the same period a year ago, with 579,260 workers removed from the payroll so far this year.

While the most recent gross domestic product figure showed that the U.S. economy was still growing in the second quarter, if the employment trend continues, "it will seem like we are in a recession, particularly for job seekers," says Challenger. He adds that "the big worry is that the economy will continue to underperform."