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US Job Cuts Decline for 3rd Consecutive Month: Challenger

The number of planned layoffs at U.S. firms fell in May for the third month in a row as there was little sign so far that fiscal austerity in Washington was hampering the job market in a significant way, a report on Thursday showed.

Employers announced 36,398 job cuts last month, down 4.5 percent from 38,121 in April, according to the report from consultants Challenger, Gray & Christmas.

May's layoffs were also significantly lower than what was seen a year ago, down 41.2 percent from last May's 61,887. May typically sees the smallest number of layoffs of the year, the report said.

For 2013 so far, employers have announced 219,560 cuts, compared to the 245,540 jobs that were cut in the first five months of 2012.

(Read More: Private Job Creation Weak; Summer Slowdown Looms, ADP Says)

"So far, the threat of massive job cuts related to federal spending cuts has failed to materialize," John Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.

Although the job market is not out of the woods yet as far as the potential for government downsizing is concerned, improvements in the economy may delay or minimize the impact on the workforce, Challenger said.

Across-the-board government spending cuts of $85 billion, known as the sequester, went into effect in March, and recent data has hinted the belt-tightening is starting to crimp overall growth.

(Read More: Traders Confused: Is Jobs Market Improving or Not?)

There were fewer than 1,500 job cuts directly attributed to federal cutbacks and the sequester, Challenger said.

Still, the health-care sector suffered the biggest job losses last month, with layoffs rising to 4,886.

The report comes a day ahead of the key U.S. jobs report, which is forecast to show job gains picked up only modestly to 170,000 in May, while the unemployment rate is expected to hold steady at 7.5 percent.

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