Announced U.S. Job Cuts Drop 37% From Year Ago, Challenger Says
Employers in the U.S. announced fewer job cuts in August than the same month last year as government agencies and retailers pared reductions.
Planned firings decreased 37 percent from August 2011 to 32,239, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. It was the fewest for any month since December 2010.
“There is a chance workers might be spared from a renewal of large-scale job cuts, but the situation beyond our borders certainly will not inspire companies to start adding workers en masse,” John A. Challenger, chief executive officer of Challenger, Gray and Christmas, said in a statement. “The ongoing crisis in Europe and weak economies around the globe will undoubtedly take a toll on the economy.”
Compared with July, job-cut announcements fell 13 percent. The figures are not adjusted for seasonal effects, so economists prefer to focus on year-over-year changes rather than monthly numbers.
Telecommunications led all industries with 4,584 planned job cuts in August. There were 4,205 planned reductions in the health-care industry.
Government agencies planned 1,193 dismissals in August, down from 18,426 a year earlier. Job-cut announcements in the finance industry fell to 535 in August from 8,094 12 months earlier. Reductions among retailers totaled 862 last month, down from 5,901 in August 2011.
California led all states with 8,859 announced dismissals last month, followed by Kentucky with 3,033 job cuts.
The report also showed that employers announced plans to take on 12,079 workers in August compared with 10,350 the prior month. The auto industry showed the largest increase in hiring plans last month, with 1,843 workers.
The Labor Department tomorrow may report that payrolls climbed by about 127,000 workers last month after a 163,000 increase in July, according to the median forecast of economists surveyed by Bloomberg News. The unemployment rate probably held at 8.3 percent.
Challenger’s data do not always correlate with figures on payrolls or first-time jobless claims as reported by the government. Many job cuts are carried out through attrition or early retirement. Some employees whose jobs are eliminated find work elsewhere in their companies and many announced staff reductions never take place because business improves. The totals also include foreign affiliates.
To contact the editor responsible for this story: Christopher Wellisz at firstname.lastname@example.org