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Job cut plans accelerate
Survey: Firms set 104,530 November cuts, ending first 3-month stretch at that level since '02.
December 7, 2004: 2:52 PM EST

NEW YORK (CNN/Money) - Hit by rising health care and energy costs, employers announced more than 100,000 job cuts in November, capping the first three-month stretch above that level since early 2002, an outplacement firm said Tuesday.

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Challenger, Gray & Christmas Inc. said companies announced 104,530 job cuts in November, up 5.1 percent from a year earlier and 2.6 percent from October.

The September through November totals mark the first time that announced job cuts have topped 100,000 for three or more straight months since January to April of 2002, the firm said.

"Higher health care and energy costs for employers and employees are definitely taking a toll. Companies are being forced to enact more cost-containment measures to protect profits," the firm's CEO John Challenger said in a statement.

Anthony Chan, senior economist at JPMorgan Fleming Asset Management, said the numbers -- especially the increase in announced layoffs from a year earlier -- were a "bit of a concern" given the recent weakness in the job market.

"We may be hitting a soft patch in fourth-quarter hiring," he said, pointing to last week's disappointing November jobs report. "But I think we'll snap back when we hit next year."

The telecommunications and auto industries were among the industries with the heaviest job cut announcements over the last three months, Challenger said in its report.

U.S. employers have announced 930,690 job cuts this year, down 19 percent from the same period a year earlier.

But if December cuts reach 69,310, it will mark the fourth straight year with 1 million cuts announced by U. S. employers, Challenger added.

The report also noted that a new Business Roundtable survey of CEOs at major companies found that 20 percent expect employment to fall in the coming months, up from 12 percent in the previous survey.

An earlier version of this story incorrectly said job cut plans were the worst in 2-1/2 years. We regret the error.

Challenger said the economy's biggest worry is that a "large number of lower-middle class and middle-class Americans struggling to make it paycheck-to-paycheck will be short of discretionary income during the holiday shopping season."

In addition to job cuts, the pace of job creation has been sluggish during the current expansion. The number of jobs created since the last recession ended in November 2001 has been the lowest of any economic recovery in the United States since World War II.

"We've fallen far short of prior economic expansions," said JPMorgan Fleming's Chan. "We're about 5-1/2 million (jobs) short of where would be today if this were a typical expansion."

Economic Indicators
Layoffs and Downsizing

But, Chan added, "hopefully we'll see at least 2.5 million new jobs created next year."

The U.S. economy has added 2.04 million jobs this year, as measured by the Labor Department's monthly surveys of non-farm payrolls.

Job growth slowed sharply in November after a strong October, the department reported last week. And even with the strong October, job growth over the last six months has averaged 152,000 a month, about what's needed to keep up with population growth.  Top of page

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