It's especially scary because analysts thought that jobs creation was beginning to increase, and instead the numbers continued to drop. The job cuts aren't over yet. However, the report didn't come as a surprise to everybody, and some analysts think it doesn't necessarily indicate that the unemployment rate will continue to rise or that the US economy is getting worse. The Friday labor report reflects the layoffs that occurred in the first quarter of 2001, which are only now being booked by companies, said Amanda Howard, senior analyst with Rosen Consulting, an economic consulting firm in Berkeley, California. Furthermore, there is a traditional lag time between when people lose their jobs and when they actually claim unemployment benefits, making labor statistics difficult to interpret in terms of a larger economic outlook, Howard said.
Layoffs are a gradual process and take a while to be recognized.
People thought that the last employment figures were unusually high, but that's because a lot of the layoffs hadn't been accounted for yet. Now we're seeing those layoffs show up. Though labor statistics don't specifically track technology companies, employment analysts believe that tech firms played a large role in the report's unusually high numbers. But this figure doesn't illustrate the technology industry's full impact on the unemployment rate, industry watchers say. Traditional tech companies such as Cisco, Intel, Oracle, and Sun also downsized significantly in the first half of 2001.