Employers announced 108,435 job cuts in January, the highest tally for the first month of the year since 2009, according to a report out Feb. 5, and a sign employers may be taking defensive steps against economic uncertainty.
The report, from global outplacement and executive coaching firm Challenger, Gray & Christmas, mirrored other data released Feb. 5 that suggested the labor market is cooling. Unemployment benefits claims rose in the most recent week, and job openings slipped in December.
“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January,” Andy Challenger said in a release accompanying his firm's report.
Employer plans to hire were also at the lowest since 2009, the tail end of the Great Recession, when the jobless rate hovered near double digits, Challenger said. The 5,306 hiring plans announced in January were half the 10,496 announced in December, and job cuts were more than double.
Job-market data signals slowdown ... but how quickly?
Because of the brief government shutdown in early January, the Labor Department's payrolls report will not be released this Friday as scheduled. As a result, analysts and investors were keeping close tabs on other indicators of how the economy, and hiring, are faring.
The number of Americans claiming unemployment benefits for the first time also spiked in the most recent week, the Labor Department said Feb. 5. Many economists and other analysts consider "initial claims" the best real-time read on the job market because it is released so frequently, but that can also make it jumpy.
Meanwhile, job openings continued to trend down, touching 6.5 million in December, according to the Labor Department's Job Openings and Labor Turnover report. The so-called JOLTS report is considered comprehensive, but the amount of time it takes to produce it makes it less timely.
Taken together, the morning's data made for a distinct lack of consensus among economy-watchers.
"Initial claims have returned to their trend, after a few weeks of unusually low numbers due to low seasonal hiring in Q4, and hence unusually low layoffs in January," said economists at Pantheon Macro in a note published just after the report was released.
Christopher Rupkey, chief economist at FWDBONDS LLC, a market research firm, took a gloomier view. "There were 7.4 million job openings in October and now openings are down to just 6.5 million in December," he wrote. "This is exactly what happens in a recession where the demand for labor evaporates overnight and it will be a miracle if the economy isn’t nearing very close to the shores of recession."
This article originally appeared on USA TODAY: Employers announce most job cuts since 2009 as economy wobbles
