Layoffs Dip in August From July - Report
By Pedro Nicolaci da Costa
NEW YORK (Reuters) - U.S. companies announced fewer layoffs in August than they did in July, but the number of job cuts was up sharply from the year-earlier level, still too high to signal an imminent return to strong economic growth, a new report said on Wednesday.
Outplacement firm Challenger, Gray & Christmas said job cuts announced in August totaled 140,019, down 32 percent from July, when companies announced 205,975 layoffs, but up 145 percent from August 2000.
``There is no evidence reported by any industry that anything that could be called a significant sustainable rebound is on the horizon for this year or even early next year,'' the report said.
The high-tech industries of telecommunications, computers and electronics were hit hardest -- total layoff announcements in the three sectors rose 1,223 percent from one year prior.
U.S. firms have announced a total of 1,123,356 layoffs so far this year, only 165,736 fewer than the combined total for all of 1999 and 2000, Challenger said.
But analysts cautioned against relying on layoff announcements alone to give an accurate picture of the country's employment outlook, saying announcements are not always reflected in actual job losses.
``These are announced layoffs and we haven't seen a similar numbers of claims for unemployment insurance yet, so it suggests that these announcements are being met with attrition and other factors other than plain job losses,'' said Brian Fabbri, chief economist at BNP Paribas.
Weekly initial unemployment claims are volatile and subject to seasonal fluctuations, but they did not rise consistently during the month of August. Claims fell to 399,000 from 400,000 in the week ending August 25.
Companies often make layoff announcements to show investors they are serious about cutting costs. Actual job cuts may end up being much lower than those announced months earlier.
``Announcements miss two things: the timing of the cutbacks, and the way in which they will be achieved, only part of which is likely to be layoffs,'' said Lewis Siegel, senior economist at the government's Bureau of Labor Statistics.
Other methods for payroll reduction include encouraging employees to leave voluntarily, waiting for them to retire, and not filling all existing vacancies, Siegel added.
The Challenger Gray report comes just as analysts await the government's closely watched U.S. employment report for August, which the Labor Department is scheduled to release on Friday.
Economists polled by Reuters expect the economy outside the farm sector to shed 33,000 jobs in August after having lost 42,000 in July, while the unemployment rate is seen rising to 4.6 percent from 4.5 percent.
``It's good news that corporations restructure and try to cut costs where there are extras. And it's good news from the standpoint of the economy that much of this cost-cutting so far has not really caused people who want jobs to lose them,'' Paribas' Fabbri said. |
