Today’s labor report brought mostly good news for workers. First, private sector jobs grew by 215,000 from November to December. Second, U.S. companies reported a dramatic fall in the number of layoffs during December, a new report signals. Even more promising, the rate of layoffs in 2012 was the lowest for any year since 1997. However, the third economic indicator was less promising: jobless claims went up.
The news about layoffs comes from the outplacement firm Challenger, Gray & Christmas. Here are some selected excerpts:
— “After three consecutive months of increased layoff activity, the number of planned job cuts announced in December plunged to 32,556, the second lowest monthly total of 2012” and down from 57,081 in November.
— “Due in large part to the slow pace of downsizing in the third quarter, annual job cuts totaled 523,362, which is the lowest year-end total since 1997, when employers announced 434,350 job cuts during the year. The 2012 total was 14 percent lower than the 606,082 job cuts announced in 2011.”
— ” ‘We have not seen this [lower] level of job cutting since before the dot.com collapse and subsequent 2001 recession,’ said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.”
The second set of figures about the growth in private sector jobs comes from the latest ADP National Employment Report, and stands quite a bit higher than what economists expected (original projections were around 130,000 new hires).
The ADP conducts private research and issues a report produced in collaboration with Moody’s Analytics; many analysts consider it a reliable predictor of what the Bureau of Labor Statistics will report when it releases numbers on monthly job progress.
Finally, for the bad news: the Employment and Training Administration reported 372,000 new claims for unemployment insurance last week, which is up by 10,000 from previous week. Even worse, that total from the week’s before had already been revised upward from a previous estimate of 350,000.
Yet many are taking heart in the fact that the downbeat news about unemployment claims is outweighed by the two positive reports showing a larger than expected gain in private sector jobs for December, along with a sharp fall in the number of layoffs for 2012.
More figures will be available on Friday from the Bureau of Labor Statistics, including official figures for the December unemployment rate and how many total jobs were added to payrolls in both public and private sectors.
According to economists interviewed by Bloomberg News, analysts predict that jobs on public and private payrolls in December grew by 150,000 — roughly the same number added in November. They also expect the overall U.S. unemployment rate by stand at 7.7%.
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