Wednesday, August 4, 2010

42,000 Private Sector Jobs Added in July

The private sector created 42,000 jobs in July, helped primarily by a big surge in the service sector, a report Wednesday from ADP and Macroeconomic Advisors showed.  The ADP calculations coupled with another report showing layoff activity slowing helped to provide a slightly more optimistic picture of the US jobs market.  Planned layoffs rose 6% in July to 41,676, but downsizing activity stayed at its lowest level since before the 2001 recession, global consulting firm Challenger, Gray & Christmas said Wednesday.
Job cuts remain well below the pace of last year, with the total for July about 57% lower than planned layoffs announced in the year-ago period.  Overall, there are 64% fewer job cuts announced so far this year—339,353—compared with the planned layoffs recorded in the first seven months of last year, according to Challenger, Gray & Christmas.  "It is true that job cuts have increased in each of the past three months," John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in a statement.  "However, the increases are so slight and the monthly totals so low when compared to recent years, that the trend in no way suggests a reversal of the significant slowdown in job-cut activity witnessed over the past year."

The government was the biggest sector to shed jobs for the fourth time in 2010. It announced plans to lay off 7,193 workers last month, 36% higher than in June.  "This sector has the biggest potential for additional job-cut spikes between now and the end of the year," John Challenger said.  

The government and non-profit sector plans to eliminate 105,969 jobs this year. The second-biggest job-cutting sector is the pharmaceutical industry, with 37,010 cut planned, 30% lower than in the first seven months of 2009.

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