Signs point to another month of stale job creation
With September’s job number due out tomorrow, the early signs are that we’re in for another month of lackluster job creation after employers cut more jobs last month than any time in the last two years:
U.S. employers announced the most job cuts in more than two years in September, led by planned reductions at Bank of America Corp. (BAC) and in the military.
Announced firings jumped 212 percent, the largest increase since January 2009, to 115,730 last month from 37,151 in September 2010, according to Chicago-based Challenger, Gray & Christmas Inc. Cuts in government employment, led by the Army’s five-year troop reduction plan, and at Bank of America accounted for almost 70 percent of the announcements.
Compared with August, job-cut announcements climbed 126 percent, the Challenger report showed. Because the figures aren’t adjusted for seasonal effects, economists prefer to focus on year-over-year changes rather than monthly numbers.
Government agencies announced 54,182 reductions in September. Of those, 50,000 resulted from the troop reductions announced by the Army, Challenger said.
However, expectations are that September’s employment report will show that the economy created jobs as at least one private indicator of job growth shows gains, led by the service sector. But the number will likely be far less than the 120,000+ that are needed to keep up with new prospective workers entering the jobs market.
Another ominus sign is that the economy is continuing to struggle are new numbers from Gallup show that Americans’ spending dropped in September — and for the second straight month, as consumer confidence is still low.
We’ll have a better idea in the morning as to what the picture really looks like, but historically September has been a good or stronger month after a bad August. But that doesn’t look like the case right now.