September Job Cuts Down but May Pick Up
Announcements dropped to 71,739 last month from 100,315 in September 2006, Chicago-based Challenger, Gray & Christmas Inc. said today. The figures aren't adjusted for seasonal effects, so economists prefer to focus on year-over-year changes instead of monthly figures.
Fewer announced reductions in the auto industry restrained Challenger's figures even as projected firings at housing- related companies accelerated. Weakness in home sales and increased mortgage defaults will continue to weigh on the labor market in coming months.
``The dominos are likely to continue toppling as home values fall and foreclosures continue to climb,'' John A. Challenger, chief executive officer of the placement company, said in a statement. ``Even if the worst of the crisis is over, as some are saying, we could continue to see heavy job cuts in the financial sector through the end of the year.''
Over August and September, 82% of the announced job cuts in the financial industry were from mortgage and subprime lenders, Challenger said. Reductions are spreading to related areas, like insurance and consumer products, Challenger said.
Overall, financial institutions have announced 129,927 job cuts so far this year, compared with 34,903 in the same period last year. Meanwhile, the 46,237 announcements for the auto industry through September are less than half the pace in the first nine months of 2006.
Companies in financial services announced the greatest number of job cuts for last month, at 27,169. Electronics firms followed with 13,272. Retailers had the third-highest number of sackings in September, at 5,716, the report said.
The announcements have kept coming this month. Morgan Stanley said yesterday it is cutting 600 jobs to offset a decline in mortgage-related revenue. About 500 of the eliminated jobs are in the
The number of planned job cuts fell 9.7% last month from 79,459 in August, the report said.