Planned layoffs by U.S. companies fell by 14.2 percent in February compared with the same month a year ago, according to a report suggesting Friday's monthly employment data by the government might show some resilience despite troubling signs for the future.
Employment consulting firm Challenger, Gray & Christmas Inc. also said on Wednesday that planned layoffs were down 3.9 percent in February from January.
Planned job cuts announced by U.S. employers totaled 72,091 in February, a drop from 74,986 in January and an even steeper slide from 84,014 from February 2007.
After last month's government labor market report showed U.S. payrolls shrank in January for the first time in nearly 4-1/2 years, economists will be eager to see if this is replicated in February.
The Challenger report may lend support to expectations that Friday's payrolls report will manage a small gain, but it also indicates that the problems afflicting the troubled U.S. economy are spreading throughout the labor market.
"While job cuts were down slightly, increased layoffs by government agencies and retailers provided further evidence that the impact of the housing slump is spreading beyond the housing and financial sectors," the Challenger report said.
Through the first two months of 2008, job cuts totaled 147,077, nearly even with the 146,989 cuts announced in January and February of 2007.
Following last year's mortgage market debacle and subsequent credit crisis, the financial sector has dominated job-cutting activity in recent months and remains in the lead for the year-to-date, with 22,056 job cuts through February.
However, Challenger said that for only the second time in seven months the financial sector was not the top job cutter of the month. In February, it ranked third behind the 10,870 cuts from the government and non-profits sector and 6,918 in retail. Financial sector cuts totaled 6,267.
"The fact that these two sectors topped the job-cut list in February is clear evidence that the slowdown has moved beyond the housing and financial industries," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.
Job cutting is still well below levels that could be expected during a recession, Challenger said. The 2001 recession resulted in monthly job cuts that averaged about 140,000.
"With companies currently cutting at half that level, it appears that they do not expect this slowdown to be deep or prolonged," Challenger said.
Economists polled by Reuters expected Friday's non-farm payrolls report to show a rise of 25,000 jobs. The 82 estimates ranged widely from a drop of 110,000 to a rise of 100,000.
