While planned layoffs fell to their lowest level in three months in September, U.S.-based employers announced plans to reduce payrolls by 40,289, according to the latest report on monthly job cuts, released Oct. 3, 2013, by global outplacement consultancy Challenger, Gray & Christmas Inc. That figure represents a 20 percent drop from August but is 19 percent higher than the job cuts announced in September 2012. This is the fourth consecutive month in which job cutting was heavier than a year ago.
As a result, job losses in the third quarter of 2013 were up 25 percent from a year ago. Overall, 128,452 planned cuts were announced during the three-month period ending Sept. 30, compared with 102,910 over the same stretch last year. The third-quarter total was 13 percent higher than the second quarter, when 113,891 jobs were eliminated.
Despite the recent surge, the overall pace of job cutting in 2013 is unchanged from a year ago. To date, employers have announced 387,384 job cuts, up 0.4 percent from the 386,001 announced from January through September in 2012.
For the third time in the past five months, the health care sector has reported the most job losses, with reported layoffs totaling 8,128—the highest monthly job-cut total for this sector since December 2004. So far this year the health care industry has slashed 41,085 jobs, which is 13.4 percent more losses than occurred in all of 2012.
“The health care sector is adjusting workforce levels due to cutbacks in Medicare and Medicaid reimbursements initiated under the Affordable Care Act, as well as overall reductions in federal spending due to sequestration,” said Challenger, Gray & Christmas CEO John A. Challenger in a press statement.
The financial sector had the next largest number of job cuts in September. There were 6,932 layoffs announced during the month, bringing the year-to-date total for the sector to 48,874—the most among all industries for the year, according to Challenger data. Layofffs have been particularly concentrated in the mortgage business.
“Many banks brought in extra workers in their mortgage departments to help deal with the large number of foreclosures,” said Challenger. “The number of foreclosures is now shrinking, which is eliminating the need for these extra workers. Additionally, recent upticks in interest rates have lowered demand for refinancing, which, in turn, is lowering the need for workers to process these transactions. If there can be any silver lining in job-cut announcements, the banking cuts seem to be stemming from an improving economy.”
In fact, companies with fewer than 50 employees added 74,000 positions in September—about 45 percent of the total gain in private payrolls and the biggest gain since June, according to the ADP National Employment Report, released Oct. 2. “During the month of September the U.S. private sector added a total of 166,000 jobs,” ADP President and CEO Carlos A. Rodriguez said in a statement about the report. “As in previous months, most of the job gains occurred in the service-providing sector.”
Hiring has been strong of late, with weekly jobless claims declining to some of the lowest levels seen since the end of the recession. But, Challenger cautioned, there are still many hurdles for this economy, the latest being the government shutdown.
So far, the effects of that politically motivated event have been muted. In fact, the stock market saw gains on the first day of the shutdown. And Amazon.com joined several nationwide retailers in announcing its plans to hire seasonal workers for the upcoming holiday shopping season—70,000 of them. In addition, Macy’s said it intends to hire 83,000 workers, while Target and Wal-Mart plan to hire 70,000 and 55,000, respectively.
Even so, Challenger thinks the government shutdown will have an impact on the country’s recovery from the recession. “It is important to remember that while it is critical for government spending to be reduced in order to shrink the nation’s deficit, these cutbacks do not occur in a vacuum,” he said. “They have real-world consequences that ripple throughout the economy. So the push to cut federal spending, while absolutely necessary, is going to impact jobs both inside and outside of the government. We are seeing it in health care, education, and aerospace and defense.”
Theresa Minton-Eversole is an online editor/manager for SHRM.
To read the original article on shrm.org, please click here.