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Planned job cuts soar 42% in May
Computer firms lead the surge but it's too early to worry about weakness in the economy: survey.
June 2, 2005: 1:33 PM EDT

NEW YORK (CNN/Money) - Planned job cuts soared in May after hitting a five-year low in April, but it's too early to worry about weakness in the economy, an employment firm said Thursday.

Employers announced 82,283 job cuts in May, compared to 57,861 in April, according to a monthly report issued by Challenger, Gray & Christmas.

May job cuts rose 12 percent from the year-ago period. So far this year, 427,278 job cuts have been announced, 4.6 percent more than the five-month total of 408,392 last year, the report said.

Computer companies -- which reported 17,886 cuts, or about one-fifth of the monthly total -- led the rise in May, while the transportation industry ranked second with 7,339 announced job cuts.

Weakness in the European economy contributed to the May computer cuts, the report said, adding that companies in other industries can expect to encounter similar challenges.

But it's too early to harbor concerns about a softening U.S. economy, the report said.

"If job cuts do not lessen in June, July and August, which historically are the lowest job-cut months of the year, then it might be time to be concerned about the economy's strength," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said.

The report also noted that employers appear to be retaining their workers but appear reluctant to add new ones.

Job creation, while improving, is still well below the pace of previous recoveries, it said. For more that story, click here.

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