Across the globe the scale of the economic crisis is becoming clearer every day as more job losses, factory closures and cutbacks are announced.
Manufacturing output in the US, the world’s biggest economy, slumped last month – falling to its lowest figure since 1982.
Economists had predicted a fall, but new figures show a bigger decline than expected. The US is now officially in recession.
New orders and exports fell dramatically – a sign that the recession is spreading globally.
There are now ten million unemployed Americans. Unemployment in the US leapt by 6.5 percent in October alone.
In the first ten months of the year, the US economy has lost about 1,179,000 jobs. There are widespread predictions the jobless total will top eight percent in 2009.
Two thirds of the job losses are in manufacturing but one in five were in the retail sector.
The once mighty General Motors (GM) is now considering filing for bankruptcy, with its shares falling to their lowest point in 60 years.
The company warns it will not survive 2009 without state aid.
GM’s financial arm faces imminent bankruptcy as a result of its involvement in the “subprime” mortgage market – lending money to poor people to buy homes they could not afford. Low profits led GM to speculate rather than invest.
Last month GM said it would lay off 5,500 workers in early 2009.
The cost-cutting measures are not only restricted to slashing jobs.
Last week the company also announced that it would end healthcare provision for 100,000 of its pensioners at the end of this year.
It also increased workers’ monthly pension payments by $300.
And, in a sign that the crisis in the financial system isn’t over, two more US banks, Prosperity Bank and Franklin Bank, shut their doors last week.
This brings the total number of US bank failures this year to 19.
The impact of the economic crisis on Europe is also becoming more evident. Latvia, recently hailed as a “tiger” economy, is now expected to join Iceland, Hungary and the Ukraine in begging for an IMF bailout.
Its economy contracted by 4.2 percent in the third quarter of this year compared to last year.
In Spain unemployment has increased by 37.5 percent in just a year. At 11.3 percent unemployment is the highest in the eurozone.
In Germany exports, the driving force of its economy, fell by eight percent between August and September.
Meanwhile there is growing concern that China, seen by some as a possible “saviour” of the global economy, is facing mounting economic problems.
The government announced a $586 billion state spending plan to keep economic growth at 8 percent a year but there are widespread reports that it may fall to just 5 percent.
Factory closures are becoming regular news, particularly over the last year in the Pearl River delta, one of China’s industrial centres.
Some 1,300 companies either shut down, suspended business or moved their factories in the first nine months of this year.
The Financial Times this week reported that the Chinese government was taking measures to “pre-empt worker unrest”.
It’s clear that the growing attacks on workers are creating the potential for widespread resistance to the system.