Employers in 2010 announced the fewest job cuts since 1997 as the US economy recovered from the worst recession since the 1930s, a private survey showed.
There were 529,973 planned firings last year, down 59 per cent from 2009 when job cuts reached a seven-year high, according to Challenger, Gray & Christmas Inc. The Chicago-based outplacement firm said December firings dropped 29 per cent from the same month a year earlier.
Employers announced 32,004 job cuts last month, the fewest since June 2000. While firings are slowing, job growth has been restrained, highlighting why Federal Reserve officials said they’ll move forward with a plan to purchase $600 billion in bonds to bolster the economy.
It was “still a lacklustre year for the overall job market,” John A Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “Hiring in the private sector is expected to once again be slow and steady” in 2011, he said. Compared with November, job cut announcements declined by 34 per cent.
Employers announced plans to hire 10,575 workers in December, down from 26,012 in November and 35,592 a year earlier. Companies last year announced plans to hire 403,038 workers, according to today’s report. Automotive and retail companies led the December job addition announcements, with 4,475 and 2,000, respectively.
December employment
A January 7 report from the Labor Department may show companies added 150,000 jobs in December, according to the median forecast in a Bloomberg News survey of economists. Including government agencies, employment rose 140,000 last month, according to the survey.
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.
The economy added 39,000 jobs in November and the unemployment rate rose to 9.8 per cent, according to Labor Department data. Economists surveyed by Bloomberg News last month forecast the rate will remain above 9 per cent for a third straight year in 2011, averaging 9.4 per cent.
Fed on economy
Fed policy makers last month reiterated that progress toward cutting unemployment and preventing inflation from slowing too much remained “disappointingly slow,” according to minutes of their December 14 meeting released yesterday. The officials affirmed their plan to buy $600 billion in Treasury securities through June, aimed at bolstering the economy and reducing joblessness.
Government and non-profit entities announced the most job cuts for the entire year. Governments may have even more job cuts in 2011 as federal agencies joins state and local municipalities still trying to solve budget shortfalls in eliminating jobs, Challenger said.
Massachusetts led all states, with 6,295 announced job cuts in December.
