Job growth stalls, layoffs surge

@CNNMoney August 3, 2011: 11:09 AM ET
Job growth stalls, layoffs surge

About 10,700 Borders employees are losing their jobs as the bookstore chain closes. Companies announced more than 60,000 job cuts in July. Click the photo to read about other mass layoffs.

NEW YORK (CNNMoney) -- The jobs recovery slowed for a third month in a row, according to two reports out Wednesday.

Private sector employers added 114,000 workers in July, marking a decrease from the 145,000 jobs added in June, payroll processing firm ADP reported.

That number beat economists' forecasts for 100,000 additional jobs, but it is also taken with a grain of salt by some economists, since ADP's figures have differed wildly from government data this year. In June, ADP's initial numbers topped the government figures by 100,000.

Meanwhile, a separate report showed more firms are opting to downsize, rather than add to their payrolls.

The number of planned job cuts surged to a 16-month high in July -- rising 60% in July to 66,414 from June's 41,432, according to outplacement consulting firm Challenger, Gray & Christmas.

The Challenger report characterized it as a "sudden and unexpected burst" in downsizing.

10 Job killing companies

The data was hardly a surprise though, given a flurry of mass layoffs announced in the last few weeks by Cisco Systems (CSCO, Fortune 500), Merck & Co., (MRK, Fortune 500) Borders, Lockheed Martin (LMT, Fortune 500) and Boston Scientific (BSX, Fortune 500). Those five companies alone accounted for 38,100 planned cuts in July.

"What may be most worrisome about the July surge is that the heaviest layoffs occurred in industries that, until now, have enjoyed relatively low job-cut levels, including pharmaceuticals, computer and retail," John A. Challenger, chief executive officer of Challenger, Gray & Christmas said in a statement.

The latest employment data, along with other weak reports, have economists questioning their earlier forecasts for the recovery.

High gas prices and Japan's earthquake were originally thought to be causing a temporary soft patch in the first half of 2011.

"If it was a temporary slowdown, they wouldn't actually fire people," said Paul Dales, senior U.S. economist with Capital Economics. "To actually fire people is, to me, a sign that companies believe there is a more permanent slowdown going on."

Both the Challenger report and the ADP report are known to set the tone for the government's closely watched monthly jobs report due out Friday.

Economists polled by CNNMoney are expecting 75,000 jobs were added to payrolls in the month. The unemployment rate is expected to stay at 9.2%. To top of page

Overnight Avg Rate Latest Change Last Week
30 yr fixed3.80%3.88%
15 yr fixed3.20%3.23%
5/1 ARM3.84%3.88%
30 yr refi3.82%3.93%
15 yr refi3.20%3.23%
Rate data provided
View rates in your area
Find personalized rates:
Economic Calendar
Latest ReportNext Update
Home pricesAug 28
Consumer confidenceAug 28
GDPAug 29
Manufacturing (ISM)Sept 4
JobsSept 7
Inflation (CPI)Sept 14
Retail sales Sept 14
  • -->

    Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.