Chicago financial services jobs at risk: "We've got to bail out Archer Avenue as well as Wall Street"

Planned U.S. layoffs jumped significantly in September from a year earlier, according to a report released Wednesday by a Chicago-based employment consulting firm.

“The labor market conditions are dire,” said John Challenger, chief executive officer of Challenger, Gray and Christmas Inc., which conducted the national survey.

Employers announced 95,094 job cuts in September, up 7.2 percent from August and 33 percent from a year ago.

In the third quarter a total of 287,142 job cuts were announced, a 48 percent jump from the same quarter in 2007.

Layoffs tend to be heaviest in the first and fourth quarters, Challenger said, so he thinks the numbers will keep climbing in the coming months. He doesn’t expect relief until the end of 2009.

Edward Stuart, economics professor at Northeastern Illinois University, concurred. “I think we’ve got another year of recession,” Stuart said.

The computer industry recorded the largest planned layoffs with 25,715 job cuts announced in September. It was followed by the automotive sector at 14,595 and apparel at 8,350.

The vast majority of computer jobs lost resulted from the acquisition of Electronic Data Services by Hewlett-Packard Co.

The financial industry announced the highest number of job cuts for the year to date, and the worst may be ahead.

“We’ve yet to see the impact in terms of job cuts by the financial services industry,” Challenger said. For example, he said Lehman Brothers Holdings Inc. has not reported any numbers, “though we’ve seen people walking out the door with boxes.”

Financial services jobs are at risk in the Chicago area because of consolidation in the industry, said Stuart. He added that the automotive industry would suffer as strapped consumers cut back on big-ticket items such as cars.

“Automotive manufacturing suppliers have been hit very hard,” Challenger said of the local impact. He added that housing and construction, financial services and transportation were also seeing significant cuts.

“Fortunately in Chicago we have a lot of health care and education,” Stuart said, explaining that these industries are strong because of aging baby boomers and a continuing baby boom.

Challenger said the most resilient industries in Chicago are health care, food and agriculture, basic commodities, and mining and energy.

On Friday the U.S. Bureau of Labor Statistics will release a national unemployment data for September. “I think it’s going to be another big batch of bad news,” Stuart said.

“The answer is some kind of additional stimulus package from the U.S government,” Stuart went on. “We’ve got to bail out Archer Avenue as well as Wall Street,” he added, referring to an important commercial street in Chicago.