Today’s job numbers show that the pace of job cuts continue to moderate, but calling a turnaround in hiring imminent may not only be premature, but overly optimistic. Like lost equity in housing markets, the bulk of those jobs may not be coming back or may not come back for some time.
The one bright spot on the horizon was medium-sized businesses, which had a net gain in jobs for February. Employment in manufacturing also rose. Job cuts continued at large and small businesses in February, including construction.
Overall, announced layoffs for February fell to 42,090, the lowest level since February 2008, according to data collected by the job placement firm Challenger, Gray & Christmas Inc. in Chicago.
Pharmaceuticals led the pack with 17,687 cuts followed by cuts in government and at non-profits at 4,628. The total includes planned downsizing in foreign affiliates.
However, January’s job loss total was revised from 22,000 to 60,000 jobs, making the data a little too soft to draw hard conclusions. The total for February of this year is 77 percent below the 186,350 jobs cut a year ago, in February 2009.
In the ADP employment report, which focuses on non-farm employment, private sector employment decreased by 20,000 in February. According to the report, hiring increased in medium-sized businesses (50-499 employees) by + 8000 and in manufacturing by + 3000.
The breakdown for small businesses (less than 50 employees) follows:
Total small business employment: – 18,000
Goods-producing sector: -25,000
Service-providing sector: + 7000
The jobs increase in the small business service sector was not enough to offset job cuts in the goods-producing sector. The data confirm that the small-business economy continues to shake out growth wherever it can find it, but the net decrease in jobs indicates a turnaround may be far off.
(Note that data in the ADP report is seasonally adjusted; data in the Challenger report is not seasonally adjusted.)
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