Unemployment may hit firms' incomes

NEW YORK/CHICAGO: Earnings at such companies as Ford Motor Co and ArcelorMittal may continue to decline in the next three months as the highest unemployment in a quarter-century keeps consumers from spending.

The year-over-year profit slide for Standard & Poor's 500 Index members may narrow to 21 percent from July through September, after declines of an estimated 34 percent in the second quarter and about 60 percent in the year's first three months, according to data compiled by S&P and Bloomberg. Earnings may rise by year-end based on comparisons to late 2008, which was roiled by the meltdown in financial markets.

Consumers in the US, the world's largest economy, remain concerned about jobs after unemployment reached a 26-year high in June, analysts and investors said. Until Americans start spending again on cars, cell phones and clothes, most US, Asian and European companies may keep squeezing out costs.