With the trickle of job losses in the IT sector now seeming to turn into a deluge, we're going to see lots more doom and gloom stories in the weeks ahead.

We are being warned not to talk ourselves into complete paranoia but anyone who thinks that things aren't going to get worse before they get better are kidding themselves. Although lots of analysts are still predicting a turnaround in the US economy "soon", they keep revising exactly what soon means.

Last week's Beige Book, the one that everyone looks at for a detailed assessment of US economic health, was definitely gloomy. Not surprisingly, it showed that many sectors were performing poorly and that manufacturing continues to slide. In fact, nearly 850,000 jobs have been lost in manufacturing over the past 12 months.

The services sectors are suffering knock-on effects too.

A survey by the National Association of Purchasing Managers at the beginning of the month showed weaker expectations and implied growth rates of 0 per cent for the US. Auto sales were down 7 per cent in July. Consumer credit was down $1.6 billion (€1.8 billion) against an expected rise of $7.8 billion and layoffs in July were the highest on record at more than 200,000.

So, when we're looking for the US to get the global economy back on track "soon", we're looking for the impossible.

While more bad news from the IT sectors is practically mandatory at this point, the fact that manufacturing is doing so badly is more worrying. Procter & Gamble reported a first-quarter loss for the first time in eight years. Of course, if manufacturing and services are suffering, one of the first things they'll cut back on is spending on technology, thus rather neatly putting IT firms under even more pressure.

In the Republic, the slowdown in growth we're experiencing is not exactly a bad thing since our infrastructure is still straining at the seams but, although consumers may still feel relatively secure despite some of those high-profile job losses, manufacturers are bracing themselves for tougher times ahead.

Business activity here was significantly lower in July according to NCB's Purchasing Managers Index - export orders contracted for the third month in a row and are falling at the fastest rate since the survey began, while the quantities of raw materials on order have also shown the sharpest falls in the survey to date.

And, while the optimists still outnumber the pessimists, those optimists are feeling decidedly less optimistic than they were a few months ago!

In Britain, it seems that 40 per cent of workers are now getting worried about their job security, particularly, of course, anyone employed in the IT and financial services sectors. Since financial services were one of the big benefactors of the booming economy, they're right to be worried.

In Germany, unemployment has risen to more than 9 per cent. Commerzbank, the big German house, has reported profits down by 87 per cent. It responded - you guessed it - by cutting jobs and cancelling IT projects.

The Financial Times recently published a list of job losses in the financial services sector this year. All the big names were there - Goldman Sachs, Morgan Stanley, Merrill Lynch et al - and the total losses were more than 25,000.

Not a particularly nice time to be in investment banking, especially since the global houses will shed jobs anywhere they feel that they can make significant savings.

In fact, probably the only thing that's holding them from more widespread cuts is the fear that the upturn will happen sooner than they think and they'll suddenly have to pay up for staff all over again.

A few months (even weeks ago) people were saying that everything would be okay by the end of the year in the United States, but that "soon" is still too soon.

The market now thinks the Federal Reserve will cut rates again on August 21st, which seems very likely.

The thing is, I'm not sure that cheaper money will tempt nervous businesspeople out of their bunkers.

Lots of companies still carry heavy inventory built up over the past year and they don't need to gear up any more.

Commerzbank isn't the only one that's putting IT projects on the back burner. Commentators like to point to the resilience of the US economy but so many firms have seen money poured down the black hole of dubious "Web strategies" without return that even the resilient Americans need to spend some time navel-gazing about what to do next.

Mr Paul O'Neill, the US Treasury Secretary, has warned people about the "endless drumbeat" of downbeat commentary regarding poor corporate earnings. He's more optimistic than most - but it's his job to be optimistic.

It's easy for the markets and the media to work themselves into a frenzy of downbeat mania and to shift sentiment along the gloomy path.

Just as easy, in fact, as it was for them to hold out the promise of an economy that could deliver the good times forever.

We have to be realistic. In July, the markets were rocked by the announcement that JDS Uniphase, a chip manufacturer, reported losses of more than $50 billion for the financial year.

Lucent Technologies announced a third-quarter loss of $4.25 billion. JDS cut 16,000 jobs, Lucent cut 20,000. You can't have those scales of losses without someone feeling the pinch . . . and without that pinch being felt outside the US too.

As a guest on a radio show last Sunday, I was asked advice from a person who had twice been made redundant from IT jobs in the Republic.

She was at home now with a state-of-the-art PC and lots of paper.

She was thinking about writing a book. Maybe novel writing is the fallback position for all of us.

Rather fortunately I was never actually made redundant myself (managing somehow to escape a number of cyclical downturns in the financial services sector), so my career change was by choice rather than necessity.

People I meet want to believe that there's a secret formula in writing books but actually there isn't.

You pick a subject, you start at the beginning and you keep going until the end.

And you hope that, when the microchips are down, consumers will go for some low-tech escapism to take their minds of it all.