Reports cite big job cuts in January, more job-seekers in market
The unemployment rate rose in January, while job cuts soared as much as 39% year over year, according to three separate reports Thursday. But don’t panic -- Experts say the new data is not only expected, but possibly even promising.
Gallup said that joblessness rose to 8.6% from 8.5% in December. But the polling group added that the figure is down significantly from the 9.9% recorded for January last year and the 10.9% rate from the same month in 2010.
The percentage of people working part-time but hoping for full-time work spiked to 10.1% from 9.8% in December, reaching its highest level since Gallup began keeping track of the measure at the beginning of 2010.
But the group’s economists weren’t too perturbed – they said the numbers could signal a growing workforce as job-seekers who had dropped out of the hunt decide to start looking for work again.
Also on Thursday, outplacement firm Challenger, Gray & Christmas Inc. said that the number of planned job cuts leaped to 53,486 in January. That’s a 28% increase from December, but a whopping 39% hike from January 2011.
The swell, however, “is not unusual” because January is historically the month with the most headcount reductions, followed by October, the company said. The January 2011 total of 38,519 layoffs was the lowest figure on record for the month.
Retailers made the most cuts, removing more than twice as many staffers as they did in January 2011, even without factoring in the departure of seasonal workers. A rush of restructurings, store closings and other cost-cutting measures was to blame, according to Challenger.
The financial sector had the second-most cuts. The largest group of layoffs came from Texas, with 11,606 total. Employers in California announced 1,381 cuts.
Private-sector employment rose by 170,000 jobs in January, a slower pace than the 292,000 jobs that were added from November to December, according to a Wednesday report from Automatic Data Processing Inc.
Thursday’s reports are a prelude to the government’s official unemployment data, which will be released Friday. The Labor Department said that the December unemployment rate fell to 8.5%, its lowest point in nearly three years.
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