Friday's report that unemployment surged to a five-year high in August helped underscore that businesses facing cutbacks and layoffs are not alone.
The Labor Department reported that jobless claims rose to 6.1 percent in August as employers cut 84,000 jobs. Job losses are at 605,000 for the first eight months of the year, with the housing, credit and financial crises continuing to pummel the economy.
Already coping with the loss of advertising revenue to the Internet, the newspaper industry also was battling the loss of advertising revenue that hits it in any downturn. Add to that the weight of rising fuel costs, and housing and other economic concerns that also cut into ad revenue, and the sector is in a bind.
The McClatchy Co.'s Sacramento Bee, Fresno Bee and Modesto Bee newspapers offered buyouts to a majority of their staffers. McClatchy also said it would freeze pay across the company for a year starting on Labor Day, while Gannett Co. announced in mid-August it was cutting 1,000 jobs, including 600 layoffs.
The moves followed a June announcement by Tribune Co. for deep staff cuts at The Hartford Courant and The Baltimore Sun as well as at The Palm Beach Post and the Daytona Beach-Journal. The company, one of the nation's biggest newspaper publishers, went private last year in an $8.2 billion deal that left it with lots of debt. The company is cutting labor costs and it is selling assets to generate cash.
"Newspapers are facing very significant structural changes," Mike Simonton, a media analyst at Fitch Ratings, a credit analysis agency, said. He said labor typically accounts for 50 percent of a newspaper publisher's costs.
By comparison, the leisure industry _ also usually sensitive to overall economic conditions _ is faring well.
In the cruise sector, Miami-based Royal Caribbean Cruises Ltd. said in July that it would cut 400 land-based jobs as it struggles with escalating fuel costs. But Sean P. Smith, a senior equity analyst with Zacks Investment Research Inc., said the cruise industry is still reporting relatively strong top-line demand.
Both Smith and Ben Bubeck, a director in corporate ratings at Standard & Poor's, contend that consumers are still reluctant to give up their vacations, benefiting Royal Caribbean and Carnival Corp.
The hotel industry shed more than 8,000 jobs in August, though American Hotel & Lodging Association President and Chief Executive Joe McInerney noted that the industry retained jobs through the first half of the year.
He said the industry has become more efficient since the last industry downturn in 2001.
"After 9/11, (hotels) really restructured how they were doing business and the number of people they needed to operate," McInerney said. "And when business started to grow, they didn't go back to their old ways of doing business."
Except in February, the first half of this year saw fewer layoffs and a lower overall job separation rate in the hotel industry than in 2007.
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