Planned job cuts in the U.S rose sharply in February to reach an 11-month high, a nation-wide survey of employers revealed.
Job cuts announced by employers in the U.S. stood at 50,702 in February, up 32 percent from January, Challenger, Gray & Christmas, Inc said in a report on Wednesday.
“It is too soon to say whether the increases in January and now February represent a trend. Certainly the specter of rising gas prices could impact employers’ staffing decisions over the next six months. At the very least, rising energy costs could force employers to postpone hiring plans. At worse, increased costs could kill the fragile recovery and spur another round of layoffs,” said John A. Challenger, CEO of Challenger, Gray & Christmas.
Also, planned layoffs were 20 percent higher in February compared with the same month last year, marking the first year-over-year increase in monthly job cuts since May 2009.
However, total job cuts in the first two months this year was 21 percent lower compared with the same period last year.
The largest portion of layoffs in February came from government and non-profit employers, which announced 16,380 job cuts, up 154 percent from January and 196 percent higher than a year ago.
“More job cuts at the federal level are expected in the months ahead as pressure mounts to cut costs and rein in the soaring national deficit,” said Challenger.
Layoffs in the retail sector increased 44 percent to 8,360 in February, indicating a slowdown in consumer spending.
“Of course, if gasoline tops $4.00 per gallon in the coming weeks, consumers may be forced to make significant changes to their spending habits. At this stage of the recovery, that could be an extremely damaging setback,” said Challenger.
Region-wise, Michigan saw the highest job cuts of 8,985 in February followed by California and Illinois with 7,150 and 6,122 job cuts respectively.