Reports: Layoffs low, but so is hiring

NEW YORK (CNNMoney.com) -- Planned U.S. layoffs fell 23 percent in July to the lowest in 12 months, according to one survey released Wednesday, but a separate reading showed relatively modest gains in private sector employment in the month due to cutbacks in manufacturing and construction.

Announced layoffs totaled 42,897 in July, down from 55,726 in June, according to Challenger, Gray & Christmas Inc., an employment consulting firm. July's job cuts were the lowest since July 2006, when they totaled 37,178. But cuts in the transportation and electronic industries were the most in more than a year, according to the report.

High fuel costs pinched the transportation industry in particular, leading to 9,722 layoffs in July, the most of any industry. Mortgage-related businesses in the financial sector apparently had a slight respite from job cuts in July, but John A. Challenger, chief executive officer of Challenger, Gray & Christmas, warned that more could be in store.

"We have not seen the end of housing-related job cuts. The collapse in subprime lending will continue to ripple through the financial sector," he said.

The financial sector continues to lead job cuts for the year, with 67,006 year-to-date, compared with 31,680 in 2006.

Meanwhile, the monthly report from payroll service firm ADP estimates that private sector employment saw a net gain of only 48,000 jobs in the month, as large employers, particularly in manufacturing, cut back on employment. The same report showed an increase of 150,000 private sector jobs in June.

Both reports come two days ahead of the government's closely watched July employment report. Economists surveyed by Briefing.com are forecasting a net gain of 135,000 jobs in July, little changed from the 132,000 increase reported in June. The unemployment rate is forecast to remain at 4.5 percent. The government report looks at all non-farm jobs, including those in the public sector.

The ADP report, which uses data collected from 383,000 employers who between them have nearly 23 million employees, estimates that small and medium size businesses added 61,000 jobs in the month, while large employers trimmed 13,000.

The goods producing sector, which includes manufacturing and construction, is seen trimming 41,000 jobs, with a 23,000-job reduction taking place in manufacturing. But the service sector is seen adding 89,000 jobs.