Number of cuts announced by U.S. firms retreats in December; 2003 cuts down 16 percent from '02.
January 6, 2004: 10:00 AM EST
NEW YORK (CNN/Money) - U.S. job-cut announcements dipped in December, ending the worst job-cutting quarter of the year, according to a report Tuesday by an outplacement firm that keeps track of job cuts.
U.S. businesses announced 93,020 job cuts in December, down 6.5 percent from 99,452 in November, according to Chicago-based Challenger, Gray & Christmas.
December's announcements slightly exceeded those of December 2002, when 92,917 cuts were announced. There were 364,346 announcements in the fourth quarter, making it the largest job-cut quarter of 2003. The first quarter had the second-most cuts, with 355,795.
There were 1,236,426 job-cut announcements in all of 2003, down 16 percent from 1,466,823 in 2002.
"The decline in job cuts is certainly welcome news, but it is difficult to get too excited about a year in which more than 1.2 million people fell victim to downsizing," said John Challenger, the firm's CEO. "That is more than double the 553,044 job cuts averaged annually during the six-year period before the recession."
Industrial goods makers led the job cutting in December, announcing 12,039 cuts, according to Challenger. Computer firms announced 10,496 cuts, telecommunications firms announced 8,740 and consumer products makers announced 7,303.
For the full year, government and non-profit employers announced the most cuts, with 177,215, followed by telecommunications, which announced 111,342. It was the first time in three years that telecommunications did not lead all other industries.
On Friday, the Labor Department is scheduled to release data on the December unemployment rate and growth in non-farm payrolls. Economists, on average, expect unemployment to hold steady at 5.9 percent and non-farm payrolls to grow by 148,000 jobs, according to Briefing.com.
Though unemployment is typically a lagging economic indicator, the U.S. economy has enjoyed eight straight quarters of economic growth, including a growth rate of 8.2 percent in the third quarter of 2003, without significant job creation.
In fact, since the declared end of the latest recession in November 2001, nearly 800,000 payroll jobs have been lost, according to the Labor Department. That would make this recovery period the most "jobless" since World War II.
A recent decline in the number of new weekly claims for unemployment benefits, along with a surge in business spending and other indicators, have raised hopes that the economy may be close to creating enough jobs to chip away at unemployment.
But some economists worry that structural changes in the job market, including technological advances and a growing appetite for cheap offshore labor, will keep hiring growth muted in 2004, and Challenger agreed, suggesting the next job boom might not come for several years.
"These ... factors are going to keep hiring from taking off in 2004," he said. "Job seekers certainly should not expect to see a repeat of the tremendous job expansion of the mid-to-late 1990s."
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