Layoffs, Planned Job Cuts Both Improve in April

Private sector employment decreased by 491,000 and planned layoffs at U.S. firms fell for a third consecutive month in April, hitting their lowest since last October and providing yet another sign that the world's largest economy may be bottoming out.

AP

Planned job cuts announced by U.S. employers totaled 132,590 in April, a 12-percent drop from the 150,411 layoffs recorded the previous month, according to a report released on Wednesday by global outplacement consultancy Challenger, Gray & Christmas.

Separately, ADP said the rate of layoffs appear to be slowing.

The 491,000 job cuts in April compared to a revised 708,000 lost in March that was originally reported at 742,000 jobs lost.

Economists had expected 650,000 private-sector job cuts in April, according to a Reuters poll.

Stock futures turned positive following release of the ADP report.

On planned layoffs, the Challenger report showed this was the lowest monthly total since 112,884 cuts were announced last October, but still up 47 percent from the 90,015 job cuts announced in the same month of 2008.

"Job cuts are still at recession levels, but the fact that they are falling is certainly promising and may suggest that employers are starting to feel a little more confident about future business conditions," said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.

The latest figures illustrate the wide path of economic destruction caused by the current recession, which is on track to be the longest since World War II.

The slump that started in the housing and financial sectors has spread rapidly and is now wreaking havoc on the automotive sector, which accounted for one of every seven job cuts this year and continued to see heavy downsizing in April.

The auto industry announced another 24,172 job cuts during the month, bringing its four-month total to 101,036. Ailing U.S. auto manufacturer Chrysler filed for bankruptcy on April 30.

Autos, however, were not the worst-hit U.S. sector in April as the government/non-profit sector led with 27,624 job losses for the month, followed by the automotive sector's 24,172 and 18,636 in the industrial goods sector.

The jobs misery in the government sector comes despite Washington's efforts to bolster employment there with billions of dollars worth of economic stimulus.

"State and local governments, as well as school districts, are really feeling the impact of this downturn. They are losing revenue from property taxes as foreclosure rates increase as well as from declining sales and income taxes," Challenger said.

ADP: Layoffs to Continue

Even though traders greeted the ADP numbers with powerful optimism, there were warnings that the economy was far from out of the woods.

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"Despite some recent indications that stock prices, consumer spending and housing activity may be bottoming out, employment, which usually trails overall economic activity, is likely to decline for at least several more months, although perhaps not as rapidly as during the last six months," Joel Prakken, chairman of Macroeconomic Advisers, said in a statement.

Construction employment fell by 95,000 in the month, making the 27th consecutive monthly decline. The sector has lost 1,261,00 jobs since the January 2007 peak, the company said.

Yet the decline was the smallest since November, giving rise to hope that the picture was changing.

Elsewhere in the report, service sector jobs fell by 229,000, and the goods-producing sector fell 262,000. Manufacturing lost 159,000, the 38th consecutive monthly decline.

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