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June job cuts highest since Jan. '04
Layoffs in auto, retail sectors to blame for surprising monthly number, employment firm says.
July 6, 2005: 10:01 AM EDT

NEW YORK (CNN/Money) - Job cuts jumped 35 percent in June, with the number of layoff announcements pushing the monthly total to its highest level since January of last year, an employment firm said Wednesday.

Employers announced 110,996 job cuts in June, compared to 82,283 in May, according to a monthly report issued by Challenger, Gray & Christmas.

June job cuts rose 73 percent from the year-ago period. So far this year, 538,274 job cuts have been announced this year, 14 percent more than the six-month total of 472,735 last year.

Despite reports that show economic growth and job gains, major layoff announcements in the auto and retail sectors contributed to the surprise June number.

"The fact that job cuts are rising in the summer is not even the most surprising trend. The surprise is that we are seeing a growing number of mass job cuts," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

"The cuts are not necessarily an indication of economic weakness, but rather the by-product of numerous trends, including changing consumer demand, outsourcing, mergers and acquisitions, automation and consolidation. We are also starting to see job cuts resulting from higher health care costs as well as higher oil and natural gas prices."

The struggling U.S. auto industry cut 45,378 jobs in June while 24,065 cuts were made in the retail industry, according to the report.

The auto and retail sectors represented the most job cuts, but government employers accounted for the largest number of announcements, Challenger said, largely because of budget shortfalls.

"The pace of job cutting in the second half of 2005 is expected to stay ahead of last year, as employers continue to close facilities and consolidate in order to achieve maximum efficiency," the Challenger report forecast.

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