The news of further layoffs by big companies and the increasing concern about swine flu are casting new shadows over the US economy. As new college graduates are pouring into the labor market, job creation becomes a real "Stress Test" for the US government.

Jobless news keeps going

According to General Motor's updated viability plan unveiled on Monday, 21,000 hourly workers will be shed by 2010. Salaried employees are also expected to be cut further.

The struggling auto giant is not the only big employer that joined the laying off trend that has worsened since the outbreak of the global financial crisis last September. Leading Internet company Yahoo said on April 21 that it would cut 5 percent of its global workforce following a significant drop in the first quarter results. Apple Inc., the iPod maker was reported by Dow Jones News Agency on April 23 that it secretly dismissed about 1,600 full-time jobs.

"The unemployment rate will worsen. According to our research, the potential unemployment rate, which includes people who were finding jobs a year ago and many part-time workers, is about 15 percent," said John Challenger, CEO of Challenger, Gray & Christmas, Inc., the US premier outplacement consulting firm, in a recent interview with Xinhua.

The Labor Department said on April 23 that initial claims for unemployment compensation rose to a seasonally adjusted 640,000, up from a revised 613,000 the previous week. That was slightly above analysts' expectations of 635,000.

In another sign of labor market weakness, the number of people continuing to claim benefits rose to 6.13 million, setting a record for the 12th straight week, and the total jobless benefit rolls are the highest since January 1983.

A double digit unemployment rate in 2010 is widely predicted by economists.

"This summer will be a real hard time for the US economy since nearly 6 million college graduates are entering the work force, inflicting a great pressure on the labor market," said Huang Jing, former senior researcher at the Washington-based Brookings Institute told Xinhua.

Economic outlook remains challenging

In February, the Obama administration predicted that the economy would shrink 1.2 percent in 2009. Again, the forecast would probably fall behind the curve.

OECD projected at the beginning of April that the world economy would contract by 3 percent, and world trade would decrease 13.2 percent.