Planned layoffs at U.S. firms fell in August, suggesting less stress on the labor market and improvements in consumer spending and the broader economy in the coming months, a report released on Wednesday showed.
Planned job cuts announced by U.S. employers fell to 76,456 last month, down 21 percent from 97,373 in July, according to a report released by global outplacement consultancy Challenger, Gray & Christmas, Inc.
While the rate of layoffs has slowed, the cumulative number of job cuts has climbed to 1.07 million from January through August, 60 percent higher than the same period a year earlier.
But August's layoffs were the second smallest monthly total so far in 2009, the firm said. It also marked the sixth time in the past seven months that job cuts fell from the prior month.
That does not necessarily mean that there will be a sudden surge in job creation as 2010 gets underway, but we will at least be heading in the right direction, said John Challenger, the firm's chief executive, in a statement.
The planned job cuts in August were led by government and non-profit sector, which announced 38,586 layoffs, as it has struggled with falling tax receipts.
While the federal government has been one of the few employers creating jobs, the U.S. Post Office said last month it aimed to reduce 30,000 or roughly 4.6 percent of its payroll mostly through early retirement buyouts.
Fortunately, the job cuts by the post office are not indicative of a coming surge in federal government downsizing. Rather, the cuts are tied to falling mail volume as more Americans rely on e-mails, Challenger said.
An encouraging sign is job cuts outside the government are steadily shrinking. If monthly job cuts stay near or below 100,000, it will be a strong indication that the economy and job market are improving, he said.