Quick war does not mean job rebound - Your Life - Brief Article

Despite the speedy resolution of the war in Iraq, the grim outlook expressed by the nation's leading chief executive officers does not augur well for an upturn in hiring this year. Who claimed victory in Iraq would turn the economy around anyway? A quick victory in Iraq never meant a simple end to the destabilization in international relations and the global economy that began with 9/11, argues John A. Challenger, CEO of the international outplacement firm Challenger, Gray & Christmas.

Even after it was clear that the war in Iraq would end quickly with the victory going to coalition forces, members of the Business Roundtable, made up of chief executives from the nation's largest employers, said they expect the U.S. economy to grow just 2.2% in 2003, slightly lower than 2002's 2.4% gain.

It would not be advisable to bet against these projections, Challenger cautions, considering that these are the decisionmakers whose companies will largely determine the strength of the economy. The fact that only nine percent of those corporate leaders expect to hire new workers, while 45% anticipate reducing their payrolls, is perhaps the most-telling sign that the job market--and therefore the economy--will be slow to recover.

The biggest question, however, is what will actually spur capital spending and foster enough consumer spending to revive the economy? A tax cut, more interest rate reduction, a pickup in global demand, a wringing out of excess capacity--all these solutions seem unlikely to have much impact in the near future, Challenger believes.

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