U.S. employers in May announced plans to cut 68,623 jobs, the smallest number of intended firings in 30 months and a sign that the worst round of layoffs may be over, a private survey found.
Announcements last month were down 53.1 percent from 146,399 announced in April and 19.2 percent from 84,978 in May 2002, according to the Chicago-based placement firm Challenger, Gray & Christmas Inc. The May total was the smallest since November 2000, four months before the economy fell into recession.
"The 'missing-in-action' kick-start that will propel the economy out of the doldrums may be close at hand," said John Challenger, chief executive officer of Challenger, Gray. "It is highly likely that companies will now take a breather, with the job-cutting frenzy of the last three months abating."
In the three months through April, the economy shed 525,000 jobs and the unemployment rate matched an eight-year high at 6 percent. Economists surveyed by Bloomberg News said they expect the Labor Department Friday to report the loss of 30,000 more jobs in May and a rise in joblessness to 6.1 percent, based on the median of 67 forecasts. Some economists said the Challenger findings didn't prompt them to revise their estimates.
"Other employment indicators (unemployment claims and the jobs-related components of the Conference Board's consumer confidence report) do not suggest that labor market conditions have improved," said John Ryding, chief market economist at Bear Stearns Inc. in New York, in a research note. "This report does not change our forecast for the May employment report, where we look for a 40,000 decline in non-farm payrolls and a rise in the unemployment rate to 6.1 percent."
Drew Matus, senior U.S. economist at Lehman Brothers Inc. in New York, said he still expects that May payrolls dropped 50,000 and unemployment reached 6.1 percent.
In the previous four months, companies announced plans to fire 502,194 workers, Challenger said.
The slowdown in firing intentions was led by fewer cuts among government and non-profit agencies. Such employers announced plans to fire 9,180 workers last month, down from 57,927 in April. Transportation companies announced 9,226 job cuts last month, Challenger said, followed by the government and non-profit agencies.
Some of the industries that have led the pack in firings over the past few years are showing an improvement, according to Challenger. Telecommunications and computer companies have announced 54,278 job cuts from January through May, down 67.2 percent from the same period last year.
Job-cut plans aren't the same as firings because many of the reductions will be carried out through attrition or early retirement. Some employees find work elsewhere in their companies, and many announced staff reductions never take place because business improves.
"The drop in May layoffs is diminished by the observation that layoffs each May tend to be the lowest of the entire year," said Ray Stone, managing director and economist at Stone & McCarthy Research Associates, a consulting firm in Princeton, New Jersey, in a research note. "On average, May layoffs are typically only around 60 percent of that for average month."