News > Economy
Planned job cuts tumble
Layoffs announced by U.S. companies sink 53% to the lowest level in 2-1/2 years.
June 3, 2003: 2:21 PM EDT

NEW YORK (CNN/Money) - Layoff announcements by U.S. companies fell in May to their lowest level in 30 months, a research firm said Tuesday, raising a glimmer of hope that the longest labor-market slump since World War II could be nearing an end.

Job-cut announcements sank 53 percent to 68,623 in May from 146,399 in April, Chicago job placement firm Challenger, Gray & Christmas said. Job cuts announced this year total 570,817 -- still high, but down 11 percent from the same period last year.

The decline could herald "an end to the job-cutting spree that has plagued American workers since 2001," Challenger CEO John Challenger said in a statement.

Some economists, however, cautioned that May is typically a low month for job-cut announcements anyway, and that it was a little too early to declare an end to the labor market's lingering pain -- the year-over-year change in private, non-farm payrolls has been negative for 22 straight months, the longest such stretch since 1944-46.

"You always have to put these numbers in context; there was quite a spike in April, and if you take the average of these two months, it's pretty close to the trend we've seen in the past year," said Doug Porter, senior economist at BMO Nesbitt Burns. "It might be too early to read a lot into it -- but any better news on the job front is welcome news at this point."

The report comes just days before the Labor Department's data on unemployment and payrolls growth in May, due on Friday. The May payrolls report is widely perceived as the first "clean" post-Iraq-war look at the U.S. job market. Economists, on average, expect the unemployment rate to rise to 6.1 percent and payrolls to shrink by 39,000, according to a Reuters poll.

For more on job-hunting, click here

The May figure for announced layoffs was the lowest since 44,152 in November 2000 and was 19 percent lower than the cuts announced in May 2002, Challenger said.

The economy may soon get a boost if small and medium-sized businesses begin to expand and start hiring due to the new tax cuts, John Challenger said.

With the job market so tough, many unemployed workers are finding it takes longer to find a new job, and that competition for positions is keen. (Click here for more).

As painful as this year's big job cuts have been, what's even more painful is that many of those jobs are never coming back, as U.S. employers in a wide range of industries move more and more jobs overseas. (Click here for more).  Top of page

-- from staff and wire reports.

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