Planned layoffs fell to a 13-month low in June as U.S. employers announced 37,551 job cuts, a 39 percent reduction from May, according to a report released Thursday from consultants Challenger, Gray & Christmas Inc.
Job cuts were also down 9.4 percent from June last year when 41,432 reductions were announced. This is the lowest monthly total since May 2011, when employers announced plans to eliminate 37,135 workers from their payrolls.
Even with recent signs that the economy is headed for another summer slump or worse, including the first contraction in manufacturing activity in three years, employers appear reluctant to shed too many workers, John A. Challenger, chief executive of Challenger, said in a statement. While it does not take long to shrink payrolls, it can take a significant amount of time to rebuild them, particularly as reports of a growing skills gap become more widespread.
June's manufacturing slowdown apparently did not lead to any announced plans for permanent layoffs during the month as all of the major manufacturing industries tracked, including industrial goods, consumer products, aerospace, defense and computers, saw job cuts decline in June.
However, announced job cuts midway through 2012 stood at 283,091, an increase of 15 percent from last year's six-month total.
The biggest job-cutting industry through the first half of 2012 was the computer industry, which announced 34,380 job cuts. That is a more than ten-fold increase from the 3,178 job cuts announced by these firms in the first six months of 2011. Most of the first-half job cuts in this sector occurred in May, when Hewlett-Packard Company (NYSE: HPQ) announced plans to eliminate 27,000 jobs.
The second-ranked transportation industry has also seen a significant increase in job cuts.
Transportation has also seen deep job cuts, with 26,615 jobs lost through June versus 6,645 from 2011. Most of the eliminations have come from airlines, including AMR Corp. (PINK: AAMRQ), United Continental Holdings Inc (NYSE: UAL), Delta Air Lines Inc. (NYSE: DAL) and SkyWest Inc. (Nasdaq: SKYW).
We probably will not see a major ramp up in hiring or firing, certainly not before the November elections, Challenger said. Even after the election and regardless of who wins, it could be several months until companies understand the full implications of the outcome and how to plan for the future.