"This is stunning, in the sense of a deer caught in the headlights," says Stuart Hoffman, chief economist for PNC Financial Services in Pittsburgh. "We are seeing a total collapse in consumer confidence in the economy, and business is laying people off and not hiring."
Many economists expect the Obama administration to present a massive economic stimulus program. Bernard Baumohl of the Economic Outlook Group in Princeton, N.J., anticipates a $500 billion to $1 trillion plan, possibly spread over two years. "It's going to be targeted to the kinds of programs that have a multiplier effect on the economy," he says.
One target is likely to be construction, which has been hard hit by the recession. At its peak in 2007, about 1 million people were involved in heavy construction. That number is now down to 946,000, according to the Department of Labor.
For every $1 billion in government infrastructure spending, 28,000 new jobs are created, according to a federal study quoted by Kenneth Simonson, chief economist at the Associated General Contractors of America. But only about 25 percent of those jobs are for construction workers. Another 25 percent are supplying industries, such as for concrete or lumber. The rest are jobs like retail and others created indirectly because workers are spending money.