The Government reported another increase in those receiving first time unemployment aid last week, as new rounds of cuts from the faltering automotive industry sends more people looking for benefits. Following Chrysler’s bankruptcy announcement on April 30th, more than 27,000 workers at plants around the country had been let go. After this announcement, the automotive company planed to cut nearly 25% of its dealers, prompting economists to worry further about the effect Chrysler’s bankruptcy will have on American unemployment figures.
As well, GM announced this morning that they plan on cutting over 1100 dealerships. This massive cut is expected to affect an even larger sample of people, compared with Chrysler’s 639 dealer closings. With letters going out this morning as to their closing, this move is expected to have an even greater adverse effect on the unemployment rolls, with cuts in sales, maintenance and more.
This conflicting view of unemployment figures- rates have raised to the highest levels, but the total number of new claims are down from their highs in January. The fate of the automotive industry is a harbinger of employment news, and demonstrates the current shakiness of the economy.