A New York Stock Exchange specialist despairs after Wall Street recorded steep losses last week. (AP)

New York, Oct. 26: Workers in the US are losing their jobs by the tens of thousands as the financial crisis crimps demand for goods and services.

Layoffs have arrived in force, like a wrenching second act in the unfolding crisis. In just the last two weeks, the list of companies announcing their intention to cut workers has read like a Who’s Who of corporate America: Merck, Yahoo, General Electric, Xerox, Pratt & Whitney, Goldman Sachs, Whirlpool, Bank of America, Alcoa, Coca-Cola, the Detroit automakers and nearly all the airlines.

When October’s job losses are announced on November 7, three days after the presidential election, many economists expect the number to exceed 200,000. The current unemployment rate of 6.1 per cent is likely to rise, perhaps significantly.

“My view is that it will be near 8 or 8.5 per cent by the end of next year,” said Nigel Gault, the chief domestic economist at Global Insight, offering a forecast others share.

That would be the highest unemployment rate since the deep recession of the early 1980s.

Companies are laying off workers to cut production as consumers, struggling with their own finances, scale back spending. Employers had tried for months to cut expenses through hiring freezes and by cutting back hours. That has not turned out to be enough, and with earnings down sharply in the third quarter, corporate America has turned to lay-offs.

“People have grown very nervous,” said Harry Holzer, a labour economist at Georgetown University and the Urban Institute, tracing cause and effect. “They have seen a lot of their wealth wiped out and as they cut back their spending, companies are responding with lay-offs, which hurt consumption even more.”

The unemployment is widespread, with Rhode Island the hardest hit.

The broadening lay-offs are most pronounced on Wall Street, in the auto industry, in construction, in the airlines and in retailing. The steel mills, big suppliers to many sectors of the economy, are shutting 17 of the nation’s 29 blast furnaces.

In September alone, 2,269 employers each laid off 50 people or more, the Bureau of Labor Statistics reported. The financial services industry has been cutting jobs since last summer, when the credit crisis took hold. By some estimates, 300,000 jobs will disappear from banks, mutual fund groups, hedge funds and other financial services companies before the crisis subsides — 35,000 of them in New York.