More good economic news. This time it’s the Challenger Job’s Report providing the fuel for better economic prospects. The January report was a record low and points to better times ahead for workers. Unfortunately, the government sector continues to deteriorate as austerity bites at the state and local level. All in all, this is positive news. While I expect tepid job growth to continue in the months and year ahead it’s still difficult to envision a job’s boom that helps to meaningfully reduce unemployment. The corporate sector is experiencing high levels of productivity, stable revenue growth, margin expansion and general strength. They are in no rush to significantly boost hiring. The Challenger Report follows:
“The slow pace of downsizing that marked the second half of 2010 appears to be continuing into 2011, as employers announced plans to cut 38,519 jobs in January. While that is an increase from the previous month, it marks the lowest January total on record, according to the report released Wednesday by global outplacement consultancy Challenger, Gray & Christmas, Inc.
January job cuts were up 20 percent from December, when planned layoffs totaled 32,004; the lowest monthly figure since June 2000 (17,241). Compared to a year ago, however, last month’s job cuts were down sharply, falling 46 percent from the 71,482 job cuts recorded in January 2010.
The 38,519 job cuts last month represents the lowest January total since Challenger began tracking monthly layoff announcements in 1993. Historically, January is the heaviest job-cut month. From 1993 through 2010, employers announced an average of 104,560 job cuts to start the year. October, the next largest job-cut month, saw an average of 84,218 cuts over the same period.
“It is not unusual to see job cuts increase in January. In fact, 2011 marks the fifth consecutive year and the tenth out of the last twelve in which January job cuts surpassed the December total. What made this January figure so unusual is that it was so low. Even in the 1990s, when annual job cuts were relatively low, January still averaged more than 74,000 job cuts,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Last month’s job cuts were led by employers in the government and nonprofit sector, which announced 6,450 planned reductions in staff. That was nearly double the 3,276 job cuts announced in December, but slightly lower than the 6,586 planned layoffs announced by these organizations a year ago. “The government and non-profit sector has, of course, struggled immensely throughout the recession and into the recovery. The sector had the second largest number of planned layoffs in 2009 and the largest number of cuts last year, by a wide margin. Unfortunately, there are no signs of a turnaround in 2011. In fact, a growing number of states are approaching a point where it could become necessary to declare bankruptcy, which will likely lead to further job cutting,” said Challenger.”
Source: Challenger Gray