U.S. January Job Cuts Fall From Year Earlier, Challenger Says
By Courtney Schlisserman
Feb. 3 (Bloomberg) -- Employers in the U.S. announced fewer job cuts in January than the same month last year, when the recession deepened and sparked to the biggest reduction in payrolls since 1949, a private survey showed.
Planned firings fell 70 percent last month to 71,482 from 241,749 in January 2009, according to data collected by the job placement firm Challenger, Gray & Christmas Inc. Announcements increased from a two-year low of 45,094 in December.
Companies are retaining staff as the economy rebounds from the worst recession since the 1930s. The pace of job cuts has slowed since employers shed 741,000 jobs in January 2009, Labor Department figures show.
“We are certainly starting 2010 on better footing than a year ago,” John A. Challenger, chief executive officer of the Chicago-based firm, said in a statement issued today. “It could be several months before hiring begins to accelerate but, in the meantime, employers are trying to hold on to the skilled workers they have counted on to get them through this downturn.”
Retail and telecommunications led all industries in job-cut announcements last month. Reductions were highest in New York, Arkansas, Delaware and California.
The Challenger report also showed companies in January announced plans to hire 31,381 workers, down from 35,592 in December.
The U.S. probably added 8,000 jobs in January, the second gain in three months, according to the median estimate of economists surveyed by Bloomberg News before a Labor Department report on Feb. 5. The unemployment rate held at 10 percent, according to the survey.
7.2 Million
The economy has lost 7.2 million jobs since the recession began in December 2007, the biggest slump in the post-World War II era. The unemployment rate reached 10.1 percent in October, the highest in 26 years.
General Electric Co. is among companies planning to hire. GE, whose power-plant equipment generates one-third of the world’s electricity, is adding workers in energy, health care and rail transportation in part because economic-stimulus policies have created demand, John Krenicki and John Rice, who are vice chairmen, said Jan. 28.
Factories have led the economic recovery, with production increasing to stabilize inventories and meet a rise in global demand. The Institute for Supply Management said on Feb. 1 that its index of manufacturing employment increased in January to the highest level since 2006.
Challenger’s data on firings does 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 jobs 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.
To contact the reporter on this story: Courtney Schlisserman in Washington at cschlisserma@bloomberg.net
Last Updated: February 3, 2010 07:30 EST
