Herald Staff and News Services
The nation’s unemployment rate shot up to 5.4 percent in October, and job losses surged to the highest level in more than two decades as the full brunt of the terrorist attacks hit an already weak economy.
Local unemployment figures for October won’t be ready for another 10 days. But a number of Snohomish County companies — many of them small aerospace suppliers — are laying off workers following the attacks.
News that Boeing has decided to speed up the pace of its planned 30,000 layoffs only makes things worse, said Bill Dugovitch, a spokesman for the Society of Professional Engineering Employees in Aerospace, the union for engineers at Boeing.
"People are discouraged," he said. "They’re upset."
Economists said Friday they no longer had any doubt that the country was in a recession and warned that it could be deeper and longer than they initially thought.
"We are clearly in the throes of a nasty recession," said Bill Cheney, chief economist with John Hancock Financial Services.
Businesses slashed 415,000 jobs in October, the worst monthly cut in payrolls since May 1980. Those widespread job losses catapulted the unemployment rate from 4.9 percent in September to 5.4 percent last month — the highest since December 1996.
Job losses touched every part of the economy, not just airlines, hotels, restaurants and other travel-dependent industries, the Labor Department reported Friday.
The aviation industry has been particularly hard-hit. The world’s airlines have announced layoffs of about 115,000 workers since Sept. 11.
And Boeing is stepping up the pace of its layoffs. Some 12,000 workers, 7,000 in the Puget Sound area, have already been notified. The second round of cuts wasn’t to take place until early next year, but this week Boeing officials said they will start issuing more notices later this month.
The pink slips will be issued on a monthly basis thereafter as Boeing moves to cut production rates in half by the middle of next year.
Boeing parts suppliers already are slashing workers, said Donna Thompson, a labor market analyst with the Washington Department of Employment Security. "A lot of these places, it’s either Boeing or an airline that they do work for," she said.
Among them is Eldec, a Lynnwood company that used to employ 800 people to design and manufacture electronic systems for aircraft. It has cut 140 people, Thompson said. Associated Painters of Everett specializes in painting airplanes, and it, too, has cut workers.
So far, 305 people have lost jobs at Goodrich’s Corp.’s Everett facility she said — although that figure is lower than the company first anticipated.
Other local aerospace companies have contacted the unemployment office to ask about benefits and procedures, but they haven’t yet made announcements, Thompson said.
And it’s not just aerospace companies, she added. Nord/Jeld-Wen laid off 75 workers, she said. The Everett company makes doors, and had many clients in New York City.
And Great American RV Center in Everett has closed, idling 18 people. It’s easy to understand why, Thompson said. "Those RVs, that’s a real luxury item."
Statewide, 8,872 people filed their first claims for unemployment benefits last week. That’s up 33 percent over the same week last year, and up 4 percent over the previous week.
Economists still hope for a recovery in the first part of next year and anticipate a 10th interest rate cut this year when the Federal Reserve meets Tuesday. The jobless report raises the likelihood of a bolder, half-point rate reduction rather than the previously expected quarter-point.
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