CHICAGO - The number of job cuts announced by U.S. employers in July jumped to 102,971, 48 percent higher than the same month last year, led by reductions at consumer-product and computer makers and financial-service companies, a private survey showed.
The job cuts announced last month compare with 69,572 planned in July 2004 and represent a 7.2 percent decrease from June's 110,996, the outplacement firm Challenger, Gray & Christmas Inc. said Wednesday. The firm's data aren't adjusted for seasonal variations.
July was the fifth month this year in which employers announced more reductions than they did in the same month in 2004. The surge in announcements doesn't necessarily suggest the economy is slowing because companies such as Kimberly-Clark Corp. are using reductions to boost productivity, said John A. Challenger, chief executive of the Chicago-based recruiting firm.
"Some of the cuts we see are of a strategic nature and not necessarily a sign of a weakening economy," Challenger said in a statement. In the case of Kimberly-Clark, "the job cuts are a proactive measure to ensure continued success," he said.
Consumer-product makers last month announced plans to eliminate 19,255 jobs, followed by 17,485 at computer makers and 12,998 at financial-service firms, Challenger said.
A total of 641,245 job cuts have been announced so far this year, up 18 percent from the same period in 2004. Concern about the health of the economy will increase if this pace continues for the rest of the year, Challenger said.
"It should set off some relatively loud alarm bells about the state of the job market and the economy," he said.
The increase in the number of announced job cuts contrasts with a drop in the number of Americans filing first-time applications for jobless benefits. The average number of applications for the first three weeks of July averaged 317,000 per week compared with an average 323,000 in June.
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