What about my job?

A near meltdown of the nation's financial system will affect jobs well beyond Wall Street.

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By Jessica Dickler, CNNMoney.com staff writer

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NEW YORK (CNNMoney.com) -- The credit crisis is taking its toll on financial firms, leaving many people on Wall Street out of work and many more uncertain about whether they will lose their jobs in the coming months.

But the market meltdown is likely to have an even wider effect on the entire job market, which was weakening even before the historic meltdown of the past few weeks.

More than 600,000 jobs have already been lost this year, according to the government. And there are currently over 9.4 million people looking for work in the U.S.

Given the recent events roiling the economy, the prospects for job seekers are looking dimmer every day.

"Everybody is at risk," according to John Challenger, chief executive of global outplacement firm Challenger, Gray & Christmas.

Frozen financial markets mean that banks are putting the brakes on lending. With businesses finding it harder to get financing, that could hinder their growth and lead to more layoffs.

That, in turn, compels consumers to curtail their spending, slowing economic activity even more...which leads to more layoffs, Challenger explained. It's a "negative spiral," he said.

Job hunters share their stories

Alicia Zajaceskowski, 40, was laid off from her job as a loan officer at a San Diego, Calif. bank in July, and says her search is getting tougher.

Zajaceskowski, who has also worked at JPMorgan Chase (JPM, Fortune 500), spends each day looking for jobs, and says she's running into more competition than ever.

"It's hard to get an interview," she said. And if she does, it's even harder to stand out. "I have been to interviews were there were 37 people."

Richard Paris, president of Marcum & Kliegman Executive Search in New York, agrees that things are getting tougher for job hunters across the board. "In the last month, [hiring] has slowed down dramatically," he said.

Hayden Grant, 31, lost his administrative job at Bear Stearns four months ago. Since then, Grant has applied for countless jobs, but has yet to land another full-time position.

"I have been on interviews, I've had some call backs, but there's a lot of competition out there," he said.

Grant recently started a temporary job at a PR agency in New York, which involves a lot of data entry, he said.

"I'm making about 70% of what I was making at Bear. I haven't been able to find anything comparable to what I had."

Still, Grant says he's just happy to have a paycheck. "I'm not looking for anything at the moment," he said. "There's not going to be a lot of hiring going on."

Employers cut back

Rising food and gas prices along with a distressed housing market have been taking a toll on the economy for months. So the financial industry's current crisis is adding stress to a job market that was already in trouble.

"Companies are already operating carefully," according to Bob Eubank executive director of the Northeast Human Resources Association. "Events that have happened in the last week have made companies even more cautious."

Beyond the finance industry, many companies have already started cutting back in order to cut costs, Eubank said.

Since May, General Motors (GM, Fortune 500) laid off 19,000 hourly workers, Starbucks (SBUX, Fortune 500) cut 12,000 jobs and American Airlines (AMR, Fortune 500) announced it was cutting 7,000 jobs, according to Challenger, Gray & Christmas.

Other companies have instilled temporary hiring freezes or put their hiring plans on hold altogether. "Employment expectations are down substantially," according to John Dooney, manager of strategic research for The Society for Human Resource Management.

Meanwhile, the employers that are hiring are moving slower and being more selective. Instead of three rounds of interviews, there might be twice as many, Paris said.

With the unemployment rate now at a five-year high, according to the latest figures from the Labor Department, experts say it may be a while before an economic turnaround takes hold.

According to Challenger, "the economy is going to be very slow through 2009."

Paris was only slightly more optimistic, "I would hope that the next three to six months things will start to change around," he said. "A lot of people are just waiting, holding their breath." To top of page

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