Original Link: http://www.marketwatch.com/news/story/summer-layoffs-six-year-high-challenger/story.aspx?guid=%7BD3A309BB%2D95B6%2D4656%2DBC16%2DAE2E2C9C73D3%7D
By Ruth Mantell, MarketWatch
Job-cut announcements this summer hit their highest level since six years ago, when the country was still recovering from the 2001 recession, according to a Wednesday report from consultancy Challenger, Gray & Christmas Inc.
Between May and August of this year, there were 377,325 job cuts -- the greatest number for a summer season since 2002 and up 30% from cut announcements in the first four months of 2008, according to Challenger.
Historically, summers have seen a slowdown in layoff announcements, with an average decline, from 1993 through 2007, of 15% from the preceding four months, according to Challenger.
"Hopes of a late-summer reprieve in layoffs were dashed by heavy downsizing in the automotive and government sectors, where employers announced 17,233 and 12,328 job cuts, respectively," said John Challenger, chief executive of Challenger, Gray & Christmas.
During the first eights months of 2008, job-cut announcements were up 29% from the prior year's comparable period, according to the report. At this pace, job cuts for the year could exceed 1 million for the first time since 2005, according to the report.
Challenger said he does not expect downsizing to let up during the remainder of the year.
"A collapse of Freddie Mac and Fannie Mae could set off another round of massive financial-sector layoffs," he said. "The airlines, which have already announced nearly 40,000 job cuts this year, are planning more cuts after the Labor Day holiday in an attempt to offset soaring fuel costs."
A couple of brighter spots, though, did emerge, according to Challenger:
Job-cut announcements in August fell 14% from the prior month -- though the August level was up 12% from a year before.
Financial-sector cuts fell to their lowest level since July 2007. Still, the sector is this year's largest job-cutting industry, with 102,957 announced cuts.
High-profile jobs data will come Friday when the Labor Department reports on employment for August. In July, nonfarm payrolls fell 51,000, with an unemployment rate of 5.7%. For August, economists surveyed by MarketWatch look for a drop of 75,000, and an unemployment rate of 5.8%.
The ADP report on U.S. private-sector employment for August is slated to be published Thursday. In July, U.S. private-sector employment rose by 9,000, stronger than had been forecast. For August, economists polled by MarketWatch are looking for a decline of 25,000.