January job cuts in U.S. lower than average, Challenger says
By Bob Willis Bloomberg News
WASHINGTON - Announced job cuts in January were lower than average for the month, showing firings in the U.S. are on the decline.
Employers planned to eliminate 53,486 positions, down from a January average of 101,084 covering 1993 to 2011, according to data issued Thursday by Chicago-based Challenger, Gray & Christmas Inc. The reading was up 39 percent from the same month in 2011, the lowest for any January in almost two decades of data.
Dismissals are typically highest in January than at any other time of the year, the report said, as employers focus on curbing costs. Government figures tomorrow are projected to show payrolls in the world’s largest economy climbed last month.
The increase in planned cutbacks last month from a year earlier was led by retailers and financial firms, the report said. Government agencies announced fewer-than-average dismissals over the past two months, a trend that will probably not continue, the report said.
“We expect government layoffs to be heavy again this year,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Many cities and states continue to struggle with budget deficits” and the federal government “remains under intense pressure to cut costs.”
Government agencies announced 3,021 job cuts last month, compared with the monthly average of 15,255 throughout 2011, the statement said. Government job cuts totaled 325,319 in the two-year period ended in December.
Announced job cuts last month were 28 percent more than in December. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year changes rather than monthly numbers.
Retailers announced 12,426 firings, the most for that industry since January 2010. The job cuts were due to restructurings, store closings and other cost-cutting measures and were unrelated to the departure of seasonal workers, the statement said.
Financial firms announced 7,611 firings, the most since September, when 31,167 job cuts were announced, most by Bank of America Corp.
Texas led all states, with 11,606 announced job cuts, followed by Illinois with 7,601.
Thursday’s report showed employers announced plans in January to hire 7,568 workers, down from 14,074 in December.
A report from the Labor Department tomorrow may show payrolls climbed by 145,000 workers in January after rising by 200,000 the prior month, and the jobless rate held at 8.5 percent, the lowest level since February 2009, according to the median estimate of economists surveyed by Bloomberg News.
Private companies may have added 163,000 jobs after a 212,000 gain the prior month, 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 job 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.