Merry Christmas! Now, About the New Year
Will today's giddy economic boom
give way to a brutal postholiday hangover? Last week the Dow Jones stock
average slipped on confusing news of megamergers by some companies and thousands of layoffs at others. It then
recovered slightly
after the Department of Labor announced that the November unemployment rate dipped to 4.4 percent.
But when it comes to jobs, the bad news may outweigh the good. Challenger, Gray and Christmas, a Chicago-based
outplacement firm, estimates that 1998 may set the decade's record for layoffs. It reported that U.S. firms eliminated 574,629 jobs this year -- 32 percent more than in 1997 and within reach of the 1993 high of 615,185. Some economists argue that job gains will continue to offset job losses. But economic turmoil in Asia and Latin America may make things worse.
"We are on the edge of deflation here," says Edward Yardeni, chief
economist at Deutsche Bank Securities N.A. "Companies are under enormous
pressure, and that means more mergers and layoffs." If that's true, the party will be over in 1999.