NEW YORK — This is the point in the recession where one round of job cuts leads to another.
Employers announced a total of nearly 40,000 job cuts Friday, almost all of them related to problems in other parts of the economy.
Circuit City Stores Inc. said it is liquidating, closing all its U.S. stores and cutting 30,000 jobs after being hobbled, in part, by declining consumer spending. Rental car company Hertz Global Holdings Inc. is eliminating 4,000 jobs worldwide as families and business travelers forgo trips. Insurer WellPoint Inc. is cutting about 1,500 jobs, with rising unemployment leading to fewer people with health insurance.
For the moment, every economic action seems to precipitate a negative reaction. Consumers made nervous by job cuts, tumbling home prices and swooning stocks aren't spending. That's hurt retailers and manufacturers, who have closed stores, cutting their employees' jobs or hours, which has made workers more nervous, so they spend less. And the spiral continues.
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Even falling gas prices will have hurt some workers. Petroleum company ConocoPhillips said Friday it will cut about 1,300 jobs, or 4 percent of its work force.
"There does seem to be a painful cycle emerging," said Dana Saporta, U.S. economist at investment bank Dresdner Kleinwort in New York. "Halting this cycle will require very aggressive fiscal and monetary policy."
With unemployment at a 16-year high of 7.2 percent in December and about 11 million Americans out of work, many economists expect worse news to come. Some say the unemployment rate could be headed for 10 percent — or higher — by year's end.