Employers’ planned layoffs drop 39%, to 13-month low
Employers in June planned to cut the fewest number of workers in more than a year as they try to wait out the upcoming election, according to a report from Challenger, Gray & Christmas Inc.
The outplacement consulting company found that planned layoffs announced last month slipped to 37,551, or 39% less than May’s 61,887 notices and 9.4% less than the cuts planned in June 2011. The gauge was at its lowest point since May 2011.
“Barring some major economic catastrophe, companies in the U.S. are likely to hold steady for the remainder of the year,” John A. Challenger, the firm’s chief executive, said Thursday. “We probably will not see a major ramp up in hiring or firing, certainly not before the November elections.”
The data coincided with reports Thursday from the Labor Department andAutomatic Data Processing Inc., which found that new jobless claims fell by 14,000 last week and the private sector added 176,000 jobs in June.
Analysts are now hoping that the numbers forecast an improvement in the government’s official unemployment report, which will be released Friday.
But overall, the job market continues to struggle. So far this year, employers have announced 283,091 layoffs — 15% more than in the same period last year, according to the Challenger report.
Job cuts in manufacturing, including among makers of industrial goods and aerospace and consumer products, declined even though factory activity retreated for the first time in three years.
But in the education sector, layoffs nearly doubled in June from May. Computer industry bosses also are aggressively slashing, as are transportation companies such as American Airlines parent company AMR Corp., United Airlines parent United Continental Holdings Inc. andDelta Air Lines Inc.
The weak recovery could delay further hiring, Challenger said. Recent signs show the economy “headed for another summer slump or worse.”
And deeper instability in Europe “would certainly ripple through our economy and could send us spiraling back toward recession,” he said.
On Thursday, both the European Central Bank andChina’s central bank cut key interest rates in an attempt to stimulate borrowing. And at the same time, the Bank of England said it would increase its bond-buying program in an effort to boost that country’s economy further.
