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Job-cutting jumped in September
Companies set highest number of cuts since January while hiring plans tumbled.
October 5, 2004: 2:41 PM EDT
by Mark Gongloff, CNN/Money senior writer

NEW YORK (CNN/Money) - The number of job cuts planned by U.S. employers jumped in September to the highest level in eight months while hiring announcements fell sharply, a job search firm said Tuesday.

The report came just days before the government's critical gauges of unemployment and job growth in September, but did little to clarify how strong those measures would be.

U.S. businesses announced 107,863 job cuts in September, up from 74,150 job cuts in August, a gain of 45.5 percent, according to Chicago-based Challenger, Gray & Christmas, which keeps track of monthly job-cut announcements.

It was the worst month for job-cut announcements since January, when 117,556 cuts were announced. September's job-cut plans were 41 percent higher than the 76,506 cuts announced in September 2003.

Meanwhile, companies announced plans to add just 16,166 new jobs, down from 132,105 in August.

"Historically, the period from Sept. 1 through Dec. 31 is when we see the heaviest downsizing, and this year appears to be on track to repeat that trend," the firm's CEO, John Challenger, said in a statement.

Challenger added, however, that the end of the year can also be a good time for hiring -- meaning the weak level of announcements in September is "not a good indication of stronger job creation to come."

The job-cut announcements that Challenger tracks include plans to let workers take early retirement. Many of the announced job cuts don't take place in the month they're announced, but several months later.

Challenger's job-cut announcement tally is also not seasonally adjusted. It was not clear what seasonal factors, if any, affected September cuts this year.

This September was the second-worst for cuts since Challenger started keeping track in 1993, behind only September 2001, which saw 248,332 job cuts announced, according to Robert Brusca, chief economist at Fact and Opinion Economics, an independent research firm.

In fact, in recent years, many more job cuts are announced in October than in September.

In a separate report Tuesday, the Institute for Supply Management said its service-sector employment index rose in September, an encouraging sign to some economists. But Brusca noted that the ISM index has been a fairly poor predictor of job growth in recent months.

"This really muddies the waters on jobs," Brusca wrote in a note to clients. "I continue to see a lot of labor market distress, and I am more impressed by the sudden weakness in the Challenger report than by the rebound in the cantankerous ISM."

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The government's report on September unemployment and payroll growth is due Friday. Economists, on average, expect the jobless rate probably held steady at 5.4 percent and that about 150,000 new jobs were created, compared with 144,000 in August, according to a survey by Briefing.com.

Brusca, citing the Challenger report and other signs of labor-market weakness, has forecast just 100,000 new jobs.

Challenger said most of September's job-cut plans were concentrated in the "computer," transportation, telecommunications and consumer products industries.

Of all states, Texas saw the most job-cut announcements, with 22,003. Next came Illinois, with 12,648 cuts, and Michigan, with 10,532 cuts. Georgia had 8,728 cut announcements, and New Jersey had 7,572.  Top of page




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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.