U.S Job Cuts Fall Amid Hiring Surge: Challenger

U.S. employers announced plans in February to cut 36,957 jobs, a 19 percent decline from January, outplacement consultancy Challenger, Gray & Christmas reported Thursday.

It was a 40 percent year-over-year decrease from February 2016, when employers cut 61,599 jobs.

The strong showing comes a day after another private report found an unexpected surge in private-sector job growth by 298,000 in February.

Wednesday’s report by ADP and Moody’s Analytics boosted expectations that the Federal Reserve will announce an interest rate hike next Wednesday. The most closely watched employment report comes Friday, when the Labor Department releases its nonfarm payrolls figures for last month.

According to Challenger, employers said they would hire 166,266 workers in the first two months of 2017, the highest January-February on record. The previous January-February record was in 2013, when employers announced plans to hire 152,957 workers.

“We know employers are optimistic about the future economy and they’re willing to hire new employees at this point in time,” Challenger vice president Andrew Challenger told CNBC’s “Squawk Box.”

The retail sector once again planned the most cuts as companies closed brick-and-mortar locations and steered business online. Retailers said they would cut 11,889 jobs in February, bringing their two-month total for 2017 to 34,380.

“We know that industry is going through a transformation, kind of moving from brick-and-mortar retail to e-commerce,” Challenger said. “But at the end of the day, we saw just about as many new hires announced from the retail industry this year as we’ve seen job cuts.”

The biggest cuts came from J.C. Penney, which announced plans to close up to 140 stores and lay off 5,500 employees.

“The bulk of new hires that have been announced this year were in January, when Amazon announced 100,000 new jobs that they were adding to their workforce, and so that speaks volumes about what’s happening in e-commerce today,” Challenger said.

The energy sector saw a massive year-over-year drop in job cuts, announcing only 5,930 compared with 45,154 in February 2016.

“Primarily, the reason we’ve had so many fewer cuts this year as compared to last year is because of oil prices,” Challenger said. “Last year, with low oil [prices], the energy industry was seeing a lot of extra cuts that we weren’t used to seeing, and this year it’s really kind of evened out.”

Texas was the hardest-hit state by job cuts in February, with 10,476 layoffs.

CNBC

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