Employers in the U.S. announced fewer job cuts in November than a year earlier, showing the world’s largest economy is growing enough to deter firings.
Planned firings dropped 13 percent to 42,474 from November 2010, according to figures released today by Chicago-based Challenger, Gray & Christmas Inc. So far this year, there have been 563,297 announced job reductions, more than the 529,973 for all of 2010.
Government agencies, which had the most cutbacks in November, may continue to shed military and civilian positions in 2012 amid budget cuts, Challenger said. A report later this week may show the pace of hiring failed to reduce an unemployment rate that’s been hovering around 9 percent, according to a Bloomberg News survey.
“There is still immense pressure to cut costs,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “We definitely have seen a shift away from the heavy government job cuts at the state and local level toward increased job cuts at the federal level. The worst may be yet to come, as cutbacks spread from the military to every other agency in Washington,” he said.
Compared with October, job-cut announcements were down 0.7 percent. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year changes rather than monthly numbers.
Government Job Cuts
Government and nonprofit entities led the firings with 18,508 announcements in November. Of those, 13,500 were the result of civilian workforce cuts by the U.S. Air Force, marking the third straight month of “significant” civilian and military personnel reductions, the report said.
Government agencies have accounted for 32 percent of all announced job cuts this year.
The financial services industry’s 1,681 announced firings this month brought the 2011 total so far to 56,191, which is up 162 percent from the same time a year earlier, the report showed.
California led all states with 4,121 announced job cuts in November. The District of Columbia had 15,132 reductions.
Employment cooled, the report showed. Employers announced plans to take on 63,527 workers, including about 55,000 seasonal workers hired by United Parcel Service Inc., according to Challenger. That’s down from the prior month’s 159,177 figure that mainly reflected holiday hiring at retailers.
A report from the Labor Department on Dec. 2 may show payrolls climbed by 120,000 workers in November, while the unemployment rate held at 9 percent, according to the median forecast in a Bloomberg News survey of economists. Private companies may have added 146,000 jobs after a 104,000 gain the prior month.
Challenger’s data do 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 job 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.