U.S. Job Cuts More Than Doubled in October- Report
Tuesday, November 04, 2003 3:16 p.m. ET
By Dan Wilchins
NEW YORK (Reuters) - The number of job cuts announced by U.S. employers more than doubled in October to the highest level in a year, a report said on Tuesday, raising worries that persistent layoffs would undercut the economy's robust recovery.
Planned layoffs at U.S. firms shot up to 171,874 jobs in October, from 76,506 in September, job placement firm Challenger, Gray & Christmas said in their monthly job cut report. That was the highest amount since 176,010 job cuts were announced in October 2002.
Challenger also said that according to a poll it conducted, 78 percent of human resources executives did not expect any significant upturn in hiring until the second quarter of 2004.
"We're not out of the woods yet with regard to the labor market," said Lehman Brothers economist Drew Matus.
The Challenger report raised caution that Friday's employment report could show job losses in October, throwing into question whether the economic rebound will be sustained next year.
Economists polled by Reuters expect a 55,000 rise in payrolls after a 57,000 gain the prior month, though that is below the 150,000 or more rise in payrolls that analysts believe is needed to bring down the unemployment rate, now at 6.1 percent.
In a sign the job market may face another difficult month in November, Tyco International Ltd. on Tuesday said it would eliminate 7,200 jobs as it streamlines its far-flung empire.
Even as the economy grew a whopping 7.2 percent in the third quarter, its fastest pace in two decades, firms eliminated 41,000 positions -- showing that even robust growth has not led to hiring.
Some economists cautioned that job losses in October are usually higher due to seasonal factors. Other data, like weekly claims for jobless benefits, have suggested the labor market is starting to stabilize after hemorrhaging nearly 3 million jobs in the past three years.
Manufacturers nationwide slowed their pace of layoffs in October, and some regional surveys have showed renewed hiring for the first time in the past few years. (Additional reporting by Kevin Plumberg)