Oct. 6 (Bloomberg) -- Job cuts announced by U.S. employers fell in September from a year earlier, indicating the labor market is being restrained by a lack of hiring rather than an increase in dismissals. Planned firings dropped 44 percent to 37,151 last month from 66,404 in September 2009, according to Chicago-based Challenger, Gray & Christmas Inc. The September figures ended a quarter in which job cuts were the fewest in a decade.
The reductions would have been even smaller were it not for government and non-profit sector, which last month announced the biggest job cuts since May, the report said. While some companies are putting fewer Americans on unemployment lines, others have yet to begin to add to payrolls at a pace that will boost consumer spending and the recovery.
“The low job-cut numbers we are seeing in almost every sector do not necessarily translate into increased hiring,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement. “There is hiring going on in the economy, but it is not enough to make a discernible dent in the number of unemployed.”
Compared with August, job-cut announcements rose 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 and nonprofit agencies led the firings with 11,091 announcements, followed by the pharmaceutical industry with 6,069. Government staffing is declining as the decennial federal census population count winds down and budget deficits force state and local cutbacks.
Texas, Illinois
Texas led all states with 5,995 announced job cuts, while Illinois was second with 5,918.
Companies trimming staff last month included Providence, Rhode Island-based Textron Inc. The aircraft maker plans to cut 700 jobs at its Cessna plane division as it reduces production further because demand hasn’t yet picked up after the recession.
Employers announced plans to hire 123,076 workers in September, up from 14,075 the prior month. The retail industry topped the list, with plans to take on 114,000 workers, the report showed.
Toys ‘R’ Us Inc., the world’s biggest toy retailer, said it plans to hire about 45,000 employees to cope with demand during the holiday season.
A report from the Labor Department on Oct. 8 may show companies added 75,000 jobs in September, according to the median forecast in a Bloomberg News survey of economists. Including the government, payrolls probably stagnated after a loss of 54,000 the prior month, according to the survey. The jobless rate probably rose to 9.7 percent from 9.6 percent.
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.
