Announced U.S. Job Cuts Decline 47% From a Year Earlier, Challenger Says
Job cuts announced by U.S. employers fell in June, a sign companies have enough business to retain current staff levels.
Planned firings dropped 47 percent to 39,358 from 74,393 in June 2009, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. It was the third straight month that announced reductions totaled less than 40,000.
Announced job cuts for the first half of the year totaled 297,677, the lowest six-month tally since 2000. Labor market improvement is needed to support consumer spending and the economy as it tries to withstand challenges from the turmoil in financial markets and resumed weakness in housing.
“The dramatic decline in planned layoffs over the past six months certainly suggests that the nation’s employers are not anticipating a double-dip recession,” John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Hiring will accelerate in the coming months, but not before employers maximize the productivity of their existing workers.”
Employers announced plans to hire 11,732 workers. Transportation companies and makers of industrial goods led the gains, with 3,310 and 2,362 positions announced, respectively.
While firings may be slowing, recent data indicate hiring has yet to pick up. A report yesterday from ADP Employer Services showed private payrolls rose by 13,000 in June, the smallest gain in four months and lower than economists’ projections in a Bloomberg News survey.
A Labor Department report tomorrow may show the U.S. lost 125,000 jobs in June, reflecting a drop in federal census workers as the decennial population count began to wind down, according to the median forecast in a Bloomberg News survey. Payrolls at private companies were forecast to rise 110,000, according to the survey.
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.
The number of planned job cuts increased 1.4 percent in June from 38,810 in May, today’s report showed. The figures aren’t adjusted for seasonal effects, so economists prefer to focus on year-over-year changes rather than monthly numbers.
Computer makers led the reductions last month, with 9,085 announced cuts. Government and non-profit agencies followed with 5,306. Hewlett-Packard Co., the world’s largest personal- computer maker, said June 1 that it plans to cut about 9,000 jobs.
California led all states with 14,078 announced job cuts, followed by New York, with 6,940.