The scariest hours in the day are the one before the stock market opens and the one after it closes. That’s when companies announce their layoffs. Today was no exception. Home Depot slashed 7,000 jobs. Caterpillar is whacking 20,000. Caterpillar — is it worth mentioning? — had record sales last year and made a profit of $3.6 billion dollars, which counts for nothing in today’s economy. Heads must roll.
These days, we’ll take optimism wherever we can find it. It’s been a tough search today but we found a little today in Caterpillar chairman Jim Owens’ assessment of what’s ahead:
“We are optimistic that economic conditions in the United States will stabilize later in the year and may show some signs of recovery.”
Granted, the next sentence was the announcement that 20,000 people would lose their jobs, but when’s the last time you heard someone say there may be some recovery later this year?
The CNBC anchor this morning made a big deal about that, noting that Owens is usually a pessimistic guy “who nailed the recession.”
Really? This was his comment one year ago:
I think I’m considerably more optimistic than the mood here in Davos,” CEO James Owens said Friday…. Owens said he expects “either a mild recession or a soft landing” on tap for the U.S. economy…. Issues surrounding subprime mortgages “have been with us for a while,” and the correction in the wake of the housing bubble is already under way, Owens said…. Owens said he expects to see “a bit of decoupling” between the world economy and the United States, pointing to extremely strong growth in the Middle East, Russia, and other emerging economies, where the commodity boom has fostered strong balance sheets.
Two months later — March 2008 — he was described as “a financial whiz” because he claimed the U.S. was already in recession, which it was.
“The U.S. economy is probably in recession now but will likely have real growth this year of around 0.5 percent, so very very slow growth and probably a couple of quarters of negative growth,” Owens said.
Update 10:02 a.m. – These additional layoffs were announced today:
Pfizer – 8,000
Sprint – 8,000
ING – 7,000
The consumer confidence survey will be released on Wednesday. We’re all on the edge of our seats.
Update 3:56 p.m. – The post stock-market-close layoffs:
Texas Instruments – 3,400 jobs