April 1 (Bloomberg) -- Employers in the U.S. announced fewer job cuts in March than a year earlier, a sign the labor market is stabilizing. Planned firings fell 55 percent last month to 67,611 from 150,411 a year earlier, according to data collected by the job placement firm Challenger, Gray & Christmas Inc. Announcements increased from February’s three-year low of 42,090.
Employers are retaining workers as the economy recovers from the worst recession since the 1930s. Sustained economic growth will depend on job creation, and a report from the Labor Department tomorrow may show that process in that area started to unfold in March.
“Most industries have seen sharp declines in the number of layoffs this year, compared to the beginning of last year,” John A. Challenger, chief executive officer of the Chicago-based firm, said in a statement today. “Unfortunately, many people are still jobless and many businesses still shuttered.”
Once businesses start to hire “it is a slow process,” he said. “The unemployment rate will experience a very slow decline. In fact, it could take at least five years for it to return to pre-recession levels, even with strong job creation.”
The U.S. probably added about 180,000 jobs in March, according to the median estimate in a Bloomberg News survey before the Labor Department’s report tomorrow. The gain may reflect the hiring of temporary government workers to conduct the 2010 census and also better weather than in February.
Attrition, Retirement
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 jobs 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.
Today’s report showed government and non-profit agencies led all industries in reductions last month, with 50,604 planned job cuts. Computer companies followed with 2,796 announced reductions.
International Business Machines Corp., the world’s largest computer-services provider, fired about 2,400 workers, mostly in the U.S., employee advocacy group Alliance@IBM said March 2.
More than half of the total government job cuts, or 30,000, were from the United States Postal Service, Challenger said. They are not allowed to fire employees, so the reductions will be through retirement and attrition, Challenger said.
Outside of the postal service, state and local agencies are trying to reverse budget shortfalls by eliminating jobs. Challenger said they “have yet to take full advantage” of federal economic stimulus programs, noting states have used $54.6 billion of the $182.5 billion budgeted for them.
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