US downsizing up 76% in August

Announcements of job reductions at major US employers rose by 76 percent in August, only the second increase this year, according to a monthly survey conducted by Challenger Gray & Christmas released Tuesday. Job-cut announcements rose to 65,278 in August from a six-year low of 37,178 in July "in what may signal an early start to year-end downsizing," said the firm's CEO, John Challenger. The figures are not seasonally adjusted. Layoff announcements typically fall in the summer months. The report comes four days after the Labor Department reported that non-farm payrolls grew by 128,000 in August, while the unemployment rate ticked lower to 4.7%. Government data show a softer pace of hiring, while first-time claims for jobless benefits have ticked slightly higher. So far in 2006, corporations have announced 538,914 job cuts, 24% fewer than this time last year. Annual job cuts are on pace to finish below one million for the first time since 2000. In August, computer companies led the way with 17,371 job cuts. The auto industry announced 7,639 reductions, bringing the annual total to 77,897. "There are some signs that the housing slowdown is taking a toll on jobs," said Challenger. "Job cutting in real estate this year is nearly double last year's pace." But job cutting in other housing-related sectors, such as finance or consumer goods, has not risen, he said. "The housing slowdown has not had a major impact on the job market, yet," said Challenger. The Challenger report covers only a tiny fraction of those who lose their jobs each month. In June, for instance, a total of 1.51 million workers were discharged from their jobs involuntarily, according to the latest data from the Labor Department. The layoff announcements tracked by Challenger could take place immediately or over time. The reductions could be accomplished by voluntary means, such as retirements or workers leaving for other jobs. They could be offset by hiring in other divisions of a company. Rex Nutting is Washington bureau chief of MarketWatch.