More jobs cuts in August, but pace may ease

By Reuters
Posted Sep. 1, 2010 at 8:32 a.m.

While the private sector slashed more jobs than expected in August, overall employers aren’t planning as many cuts for the future, two separate reports showed Wednesday.

Private sector employers cut 10,000 jobs in August — down from the downwardly revised 37,000 jobs they added the month before, according to a report by payroll processing firm Automatic Data Processing.

Those cuts reversed a sixth-month trend of private sector employers adding jobs and surprised economists, who had expected the report to show 13,000 jobs added in August.

ADP looks backward at the month, compiling data from actual payrolls. But earlier on Wednesday morning, a separate forward-looking report showed employers’ plans for future job cuts sunk to a 10-year low during the month.

After rising for three months in a row, planned job cuts plummeted to 34,768 last month, the lowest level since June 2000 and down 17 percent from the previous month, according to outplacement firm Challenger, Gray & Christmas Inc.

Compared to a year ago, downsizing activity dropped 55 percent in August, and job cuts have eased 65 percent so far this year compared with the same period last year.

“Every other job market indicator seems to be stuck in first gear,“ said John Challenger, CEO of the firm. “In contrast, the layoff picture has improved so significantly that we are at pre-dot-com collapse levels when it comes to monthly job-cut announcements.“

The separate jobs reports use different metrics, with ADP measuring only private sector job growth and Challenger compiling planned job cuts in the government and non-profit sectors as well as private industry.

According to Challenger, the industrial goods sector announced the most job cuts in August, planning to downsize by 6,236 workers. But job cuts in the sector were down significantly year to date, with employers cutting 16,962 so far this year — compared to 101,591 in the same period a year ago.

Despite the overall improvement in August, government and non-profit hiring continued to lag. The government and non-profit sector has shed the most jobs this year, accounting for 30 percent of all 2010 job cuts and eliminating three times more jobs than the pharmaceutical sector, which reported the second highest number of year-to-date cuts.

Real estate, chemical and commodities companies boasted the fewest job cuts in August, while the entertainment and leisure, automotive and computer sectors announced plans to do the most hiring.

Read more about the topics in this post: ,

Companies in this article

Comments are closed.