In another sign that unemployment may be bottoming out, nationwide layoff announcements in February fell to the lowest level since 2006, and the news is even better for Minnesota.
Companies announced plans to reduce payrolls by “only” 42,090, according to the monthly summary released by the outplacement firm Challenger, Gray & Christmas (PDF).
An imperfect but closely watched indicator of employer attitudes, CG&C’s report showed Minnesota with no layoff announcements for the third time in the past six months. But the state is not entirely out of woods yet, as rumors of job cuts at IBM in Rochester surfaced this week and likely would be captured in CG&C’s March report.
The February total was down 41 percent nationwide from January’s 71,482 announced job cuts and was 77 percent lower than the 186,350 job cuts for February 2009, when the economy was still in the midst of the housing and financial markets collapse, CG&C said in a prepared release.
“Most economists agree that a recovery is well under way; a position that appears to be supported by declining job-cut activity. It may be a couple of more months before hiring begins to surge, but it is clear that employers have shifted away from downsizing and are poised to start adding workers,” said CEO John A. Challenger in a prepared release.
Through the first two months of 2010, employers nationwide announced 113,572 planned layoffs. That is 73 percent below the pace established in the first two months of 2009, when 428,099 job cuts were announced. Only 200 job cuts were announced in Minnesota in January and none in February, compared with more than 5,300 job cuts announced in the first two months of 2009.
Regional layoff numbers
Downsizing announcements nationwide peaked in January 2009, with U.S. employers projecting 241,749 job cuts, the highest monthly total in seven years. Throughout the Midwest, layoff announcements peaked in February 2009 with Minnesota employers reporting 3,939 planned job cuts a year ago. Michigan and Illinois continue to bear the brunt of layoff announcements in the Midwest, according to the CG&C report.
Since early 2009, monthly job cuts have been on a downward trend, with only a couple of exceptions. Last month’s total marks a new low-point and is the lowest since July 2006, when employers announced 37,178 job cuts, CG&C said.
CG&C tracks company announcements, press reports and required filings with state unemployment offices of planned future job cuts, which can be spread out over many months. It does not capture job reductions that are unannounced or are not reported until the layoffs occur. As a result, the CG&C numbers are an imperfect indicator of employment but are a widely watched indicator of employer actions.
According to the state Department of Employment and Economic Development (DEED), Minnesota lost 80,000 jobs in 2009, a much larger number than CG&C’s compilation of 13,991 job cuts announced in the state last year.
CG&C’s report points out that industry sectors that experienced some of last year’s largest job cut announcements have improved significantly. For the first two months of the year, announced job cuts in the auto sector are down 90 percent from 70,058 last year to 7,334. The retail sector showed a 75 percent drop from 72,727 to 18,271.
“We are seeing more job cuts related to business strategy, as opposed to cuts stemming from recessionary pressure,” Challenger said. “In other words, we expect more cuts from mergers and acquisitions or from companies shifting focus from one business area to another.”