Original Article: Defense Spending Cuts Lowering Job Gains
Defense and aerospace contractors announced about 2,000 layoffs in April as a result of the budget cuts, outplacement firm Challenger Gray & Christmas said Thursday. That’s double the number of such layoffs announced in March.
The announced layoffs are just a portion of total defense job cuts of up to 10,000 in April, says economist Mark Zandi of Moody’s Analytics. Overall, economists estimate the government on Friday will report 148,000 job gains last month.
With the U.S. economy showing signs of weakening, in part because of Europe’s recession, the European Central Bank on Thursday cut a key interest rate to 0.5% to spur eurozone growth.
Besides layoffs, hundreds of defense contractors are not filling open positions and putting off new hiring, says Loren Thompson, a defense analyst with the Lexington Institute. Defense cuts likely will pare job gains by 25,000 to 30,000 a month this year, says Stephen Fuller, an economist at George Mason University, who has done studies for the AIA.