Job growth slows and layoffs rise to 16-month high, reports say
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Looking for work? Might want to try smaller businesses, which are doing the heavy lifting when it comes to job growth, according to a new report from payroll processor ADP.
Companies with fewer than 50 employees added 58,000 jobs nationwide last month, while businesses with 50 to 500 workers hired 47,000 people, according to the study. Only 9,000 new positions were at large firms with more than 500 staffers.
Small businesses have been amping up hiring for nearly two years, according to ADP.
Though 114,000 jobs were created, July’s numbers lag behind the 145,000 hires made in June. An employment report coming Friday from the Labor Department, which is expected to show even more modest figures, could throw the slowdown into sharper relief.
The service sector, including education and healthcare, grew by 121,000 jobs, according to ADP. But employment in the construction and manufacturing industries slipped.
And the stink of a sour economy loomed over layoff numbers that were also announced Wednesday. Job cuts surged to a 16-month high in July as 66,414 employees found themselves out of work, according to consulting firm Challenger, Gray & Christmas Inc.
The number of cuts was up more than 60% from June and up nearly 60% from the same period in 2010, according to the report. Industries such as pharmaceuticals and retail that previously seemed immune to heavy bloodletting were hit hard.
Though the pace of layoffs this year is still lower than 2010, the “sudden and unexpected burst in private-sector downsizing” suggests that it’s catching up, according to the study.
“A casual observer certainly might conclude that the wheels just fell off the recovery wagon,” said John A. Challenger, chief executive of the consulting firm.
But while the report raised the red flags high, it also pointed out that 57% of the month’s layoffs came from just five companies -- Merck, Borders, Cisco Systems, Lockheed Martin and Boston Scientific.
Instead of being laid low by the general economic malaise, most of the firms stumbled due to issues with their internal operations -- such as Borders’ struggles to compete against online powerhouses such as Amazon.com.
-- Tiffany Hsu