According to Challenger, Gray & Christmas, job losses slowed during May for the the fourth straight month. The report showed that job cuts totaled 111,182 during May, 16% better than the 132,590 jobs cut in April. May's total was the lowest since last September, but was still 7.4% higher than a year ago. The greatest amount of layoffs came from the government/non-profit sector for the third-straight month. The second largest amount of cuts came from the computer sector, followed by the chemical and automotive industries.
Challenger noted that while job cut totals have steadily fallen since January, growing unemployment is still a major concern. "This decline in job cuts could be short-lived," John Challenger said in a statement. "The second quarter is typically the lowest quarter of the year when it comes to job cuts." So far this year, employers have announced 822,282 jobs compared to 394,193 a year ago.
Some may take this as a hint at the monthly jobs report to be released by the government on Friday. This report is expected to show that the economy shed 550,000 jobs in May, slightly more than April. The unemployment rate is expected to rise to 9.2% from 8.9%.
John Challenger made sure to point out that the second quarter often holds the lowest number of job cuts, and expressed concern that the decline could be short-lived. If the report is stronger than expected, we will see a rally, plain and simple. My question is, if a rally ensues, is it simply investors ignoring the statistics or is it a sign of true strength? Only time will tell.
Closing Bell: Economic Catapult for Thanksgiving & Black Friday (WMT, TGT, GRMN, GOOG, MSFT)
Deere up on Q4 earnings performance
Reid Hoffman: LinkedIn will go public (at some point)
