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Planned layoffs drop to 14-year low as unemployment claims fall

Planned layoffs drop to 14-year low as unemployment claims fall
People attend a job fair at the Bronx Public Library on Sept. 17 in New York City. (Andrew Burton / Getty Images)

American companies announced the fewest planned layoffs in 14 years in September while initial unemployment claims dropped last week to near a post-recession low, two positive labor market signs ahead of Friday's jobs report.

With the slowdown in job cuts last month, 2014 is on track to have the fewest layoffs since 1997, career counseling firm Challenger, Gray & Christmas Inc. said Thursday.

"Job security is being helped by the fact that corporate profits remain near record highs," said the company's chief executive, John A. Challenger.

"So, we may see some ebb and flow in the rate of hiring, but employers, at this point, are reluctant to make any over-correction in workforce levels," he said.

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U.S.-based companies announced 30,477 planned layoffs last month, down from 40,010 in August, Challenger said. The September figure was the lowest since 2000.

Through last month, companies had announced 363,408 planned layoffs, down 6.2% from the same period last year. If the pace continues, 2014 will be the first year with fewer than 500,000 planned layoffs since 1997, Challenger said.

The private-sector layoff figures came as the Labor Department reported that initial claims for unemployment benefits fell last week to 287,000. That was down 8,000 from the previous week and near the post-recession low of 279,000 reached in mid-July.

The four-week average, which is less volatile, also fell, to 294,750. That was near the eight-year low of 293,750 hit in early August.

The new data, on top of an upbeat report Wednesday on private-sector hiring, point to a rebound in job growth last month after an August hiring lull.

Economists expect the Labor Department to report Friday that the economy added 215,000 net new jobs in September and that the unemployment rate held steady at 6.1%.

Job growth slowed in August to a net gain of 142,000, the first month since January that the economy added fewer than 200,000 net new jobs.

Economists said the August figure probably was an anomaly and expect the number to be revised up.

For breaking economic news, follow @JimPuzzanghera on Twitter

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