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US Recession Has Ripple Effect


By the time this two-minute report ends, two dozen more people will be out of work in the United States....if last month's employment losses continue through February. Every time a family loses their income and tightens the belt, there's a ripple effect with many others losing their jobs.

And that is likely to push the unemployment numbers even higher as,

Jason Poles has a lot more time to play with the kids now that he lost his job as a bank manager.

But the quest to find another job is no game.

"Losing a six figure salary in the family, that's a huge hit," Poles explains.

The first cost they eliminated? Eating out at their favorite east coast restaurant.

"We went out to a local restaurant every week, every Sunday for brunch," Poles wife said. "We go now, maybe once a month."

That restaurant is The Redstone Grill - feeling the pinch when it serves fewer guests for lunch.

"The question is sometimes, 'Where ya been?' and the answer unfortunately is they are brown-bagging it [eating a home-prepared lunch] sometimes," Scott Weber says is the explanation he receives from regular customers. Weber is the general manager.

Fewer people mean fewer tips for bartender Heather Cloud, who has stopped hiring a pet sitter for her two dogs. "I don't go out as much either," she said. "Because I am not making the money I made before."

Since it doesn't serve as much food, the restaurant cut back on its meat orders from Allen Brothers. Slower sales forced the premium meat supplier to layoff five percent of its butchers and truck drivers.

When people lose their jobs and curtail spending, there's a domino effect with many others losing their jobs too.

About 800 people are losing their jobs every hour in the United States. More than half a million became unemployed in January, the largest monthly loss since World War II. And economists don't know when hard times will end.

"We could quite possibly see unemployment close to nine or even double digits by the end of the year," says Economist Heather Boushy.

Sobering news for the bartender. The dog handler. And the butcher, as each layoff shows how the recession trickles down through unrelated, yet interdependent businesses.

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