Job cuts announced by U.S. employers increased in October from the same month last year, a sign elevated dismissals remain a hurdle to faster economic growth.
Planned firings rose 13 percent to 42,759 from 37,986 in October 2010, according to Chicago-based Challenger, Gray & Christmas Inc. Government agencies and financial companies have cut the most jobs this year, the report showed.
“We have yet to see the full impact of mandated federal spending cuts,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Meanwhile, the European debt crisis is wreaking havoc on Wall Street.”
Budgetary constraints have induced a wave of government reductions as financial firms trim headcounts, creating an impediment for American employment prospects. Federal Reserve officials may consider additional means to propel economic growth and hiring as their two-day meeting concludes today.
Compared with September, which saw the most firings since April 2009, job-cut announcements decreased 63 percent. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year rather than monthly changes.
Consumer products companies led the October job cuts with 7,169 announced reductions, according to Challenger. Retail companies followed with 4,264 planned cuts.
Benton Harbor, Michigan-based Whirlpool Corp., the world’s largest maker of household appliances, last week said it will cut more than 5,000 jobs and reduce capacity by 6 million units after lowering its earnings targets as consumers rein in spending. Whirlpool said reductions in Europe and North America account for about 10 percent of all employees in those regions.
So Far This Year
Year-to-date dismissals at government agencies and financial companies were above levels at this point in 2010. Government job-cuts have totaled 162,373 so far this year, and financial company reductions are at 54,510.
California led all states with 7,194 announced job cuts, followed by Michigan with 5,123.
Today’s report also showed that employers announced plans in October to hire 159,177 workers, including 153,540 temporary or seasonal positions. Retailers led the gains, planning to add 133,940 positions ahead of the holiday shopping season.
Employers probably added 95,000 workers to payrolls in October as the jobless rate was 9.1 percent for a fourth month, according to the median forecast in a Bloomberg News survey of economists. The Labor Department will release the figures Nov. 4.
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.