Corporate America: lean

First, corporate America is much leaner today that it was during the previous three downturns; companies are much more efficient. Wang calls 2008, "the age of perpetual right-sizing."

"If you look at most key measures -- productivity per employee, revenue per employee, costs -- corporations today are in a much stronger operational stance than they were in 2001 or during the 1990s," Wang said. "In other words, companies have to lay off fewer employees because they weren't there to begin with."

Second, the complex and sometimes contradictory signals characteristic of the current U.S. economy have required corporations to be nimble, at-the-ready for a sudden change in the economic landscape, positive or negative, Wang said.

"Most executives would agree that operationally, globalization has made corporate decisions more complicated. It's no longer 'the economy has stalled, let's lay off 10,000 employees.' The U.S. economy has slowed and we may be headed toward a recession. Or, the economy may not be headed toward recession. Or maybe the economy is, but your sector -- say, oil services -- is going to perform well, comparatively," Wang said. "Today, corporations have to be ready for both the potential slowdown, or a bigger surprise, an unexpected slow expansion."

"Corporations," Wang added, "have to be at-the-ready amid uncertainty... at-the-ready for both recession or growth. It's not an easy task, but I think it helps explain the cautious stance by corporations toward hiring and then toward layoffs during the recent economic expansion and during today's declining economic growth, respectively."

A workforce positive

Economist Steve Affinito concurred, arguing that companies' cautious hiring stance during the recent expansion is a two-sided coin, one that may yield some benefits during this economic cycle, as 2008 progresses. "Because companies took on fewer employees than during previous expansions, we may see fewer employee cutbacks during this slowdown, barring a calamity, of course," Affinito said.

Affinito was careful to qualify his remarks by noting that there undoubtedly already are sectors with large layoffs -- housing and mortgage lending being the most obvious, with banking possibly set to join that group -- but that does not refute the current modest-layoff environment.

As a result, Affinito sees only a modest rise in the U.S. unemployment rate, to 5.4% or 5.5% from the current 5%, during the current slowdown.

"If we can get fiscal and monetary stimulus into the U.S. economy in the first half of this year, and maintain liquid markets as the nation addresses the subprime default issue, we can limit the layoff downside and position the country for a resumption of growth," Affinito said. "Those are big ifs, I know, but that's what the data's suggesting is possible in 2008."