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Fewer jobs cuts in US signal weak recovery

By Yoshita Singh in Chicago
May 07, 2009 09:42 IST
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Job cut announcements by United States employers fell for the third consecutive month in April to 130,000, the lowest in six months, signalling that recovery in the strained job market may be underway, a report said on Thursday.

Planned job cuts announced by US employers totalled 132,590 in April, a 12 per cent drop from the 150,411 layoffs recorded the previous month. This is the third consecutive decline in monthly job cut announcements and the lowest total since 112,884 cuts were announced last October, a report by global outplacement consultancy firm Challenger, Gray & Christmas said.

However, the pace of job cuts is still well ahead of last year. The April total was 47 per cent higher than the 90,015 job cuts announced in the same month in 2008, the city-based firm said. Employers have announced 711,100 job cuts this year, 145 per cent more than in the first four months of 2008 (290,671).

"Job cuts are still at recession levels, but the fact that they are falling is certainly promising and may suggest that employers are starting to feel a little more confident about future business conditions. Hopefully, the next few months will bring further relief, as we tend to see downsizing activity slow during the summer months," Challenger, Gray & Christmas CEO John Challenger said.

During the month, the highest number of job cuts at 27,624 was announced in the government and non-profit sector.

"State and local governments, as well as school districts, are really feeling the impact of this downturn. They are losing revenue from property taxes as foreclosure rates increase, as well as from declining sales and income taxes. Meanwhile, their costs are growing as more people find themselves jobless and in need of public assistance," Challenger said.

The recession has taken a heavy toll on the automotive sector, which announced 24,172 layoffs, followed by industrial-goods companies, which cut 18,636 jobs through April. Economic conditions, cost-cutting, restructuring and demand downturn continued to be the main reasons for the layoffs, the report said.

However, some sectors also announced hiring plans during the month. The automotive sector announced plans to hire 11,500 people, followed by retail (7,000), financial sector (2,000) and entertainment/leisure (1,500).

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Yoshita Singh in Chicago
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