Layoff Numbers in May Hold Steady from April
Businesses planned to cut payrolls by 38,810 in May, slightly ahead of the 38,826 job cuts announced in April, the Challenger report said. Still, the numbers are vastly better than a year ago, when employers announced plans to cut 111,182 jobs.
"Announced job cuts have, for all intents and purposes, returned to pre-recession levels," CEO John Challenger said in a statement. "What makes the low job-cut totals we have seen this spring particularly remarkable is that we still have not reached what is the slowest downsizing period of the year, which typically occurs during the summer months."
Hiring plans increased in May by 14,922 positions, led by financial firms and automotive companies, the report showed, while energy and apparel sectors reported the most anemic employee growth.
The Challenger report also showed that employers cut slightly more than a quarter of a million jobs during the first five months of the year, well below the 822,282 job cuts announced during the same period a year ago.
Government workers and those who work for nonprofit firms were among the hardest hit, the report showed. Nearly 16,700 jobs in May were cut in those fields, 12% more than in April, as "the budget crisis for many states and municipalities is only getting worse," Challenger said.
New York led all states with 18,960 announced job cuts, followed by California, with 4,920, the report showed. New York Gov. David Patterson, having failed in his effort to furlough 100,000 state workers one day a week to stem that state's flow of red ink, is now focusing on cutting thousands of government jobs beginning next year to help balance the state budget.
Challenger's report comes ahead of two key jobs reports due out this week. On Friday, the Labor Department will release its monthly employment report. Analysts expect the report to show employers ratcheted up hiring during May by as much as 480,000 jobs, the largest gain since 1997. The report is also expected to show the nation's unemployment rate fell slightly to 9.8% from April's 9.9%.
Another report to be released Thursday, the ADP national employment report, is expected to show an increase of 60,000 private-sector jobs, according to Briefing.com. In April, the report showed the nation's businesses added 32,000 jobs. Investors view the report as an indicator of the economy's ability to create jobs, in addition to providing a preview of the government's report.