Employment trends suggest US business is confident of more growth
Employers make plans to hire 88,000 workers, the highest July total on record, according to a report by outplacement consultancy
New York — The number of planned layoffs at US companies dropped in July to its lowest since November while job-opening announcements notched up, a sign that businesses are confident the US economy will continue to expand.
A report released on Thursday showed US companies announced 28,307 planned job cuts in July, a 9% decline from 31,105 in June. It was the lowest since November, according to outplacement consultancy Challenger, Gray & Christmas. July’s job cuts were down 37.6% from 45,346 a year earlier.
Meanwhile, employers made plans to hire 88,000 workers, the highest July total on record and the third-highest total of the year, according to the report.
"Maybe some of these hiring announcements are just some of the exuberance that comes late in an expansion," Challenger, Gray & Christmas CEO John Challenger said in an interview. "But it may also be that some of the decision makers who decide whether to build a new plant or launch a new product or hire new people are becoming more comfortable that the recession is not imminent."
Despite low unemployment, there was slack in the system, leaving ample opportunity for employers to pick up skilled workers, Challenger said.
The so-called U6 unemployment rate, which measures the share of discouraged, part-time or underemployed workers in the economy, is at 8.6%, which is higher than the unemployment rate of 4.3%.
Amazon.com and Foxconn, the Taiwanese electronics supplier formally known as Hon Hai Precision Industry, led July’s surge in hiring-plan announcements.
Amazon announced intentions to hire 50,000 workers at its recruitment fair. Foxconn said it would build a factory in Wisconsin and add 3,000 jobs in the next three years.
Although the retail sector has been the hardest hit in 2017, there are signs it is crawling back. In the first seven months of 2017, retailers said they would add 245,616 new positions, 44% of all new jobs announced in 2017.
Data released on Thursday showed the number of Americans filing for unemployment benefits fell last week, pointing to a tightening labour market that likely keeps the Federal Reserve on course to announce plans next month to start reducing its massive bond portfolio.
Initial claims for state unemployment benefits decreased 5,000 to a seasonally adjusted 240,000 for the week ended July 29, the Labor Department said. Economists had forecast claims falling to 242,000.