People walk on the corner of 34th street and 8th avenue outside Pennsylvania Station in New York City, U.S., June 16, 2023. REUTERS/Shannon Stapleton/File photo
American employers slowed downsizing in June, announcing the lowest number of layoffs since October 2022.
According to the latest job cuts report from employment firm Challenger, Gray & Christmas released on Thursday, U.S.-based employers said they were cutting 40,709 jobs in June, down 49 percent from the number of cuts announced in May.
The planned pace of layoffs in June, however, was well above the 32,517 cuts announced in June 2022. There are 458,209 cuts so far this year, a 244-percent increase from the 133,211 layoffs announced through June 2022, as employers brace for the prospect of recession.
The labor market has remained strong despite the 500 basis points worth of interest rate hikes from the Federal Reserve since March 2022 as the U.S. central bank tries to cool inflation. Last month the Fed decided not to raise rates but indicated that there could be another two quarter-percentage-point increases before the end of the year.
Fed leaves rates unchanged, sees two small hikes by end of 2023
“The drop in cuts is not unusual for the summer months. In fact, June is historically the slowest month on average for announcements. It is also possible that the deep job losses predicted due to inflation and interest rates will not come to pass, particularly as the Fed holds rates,” Andrew Challenger, senior vice president of Challenger, Gray & Christmas, said in a statement.
Last month’s announced job cuts total was the highest for a month of June since 2020.
The technology sector continues to downsize the fastest with 141,516 total job cuts announced this year, up 2,353 percent from 5,769 over the same period in 2022. On a month-to-month basis, however, these cuts slowed by nearly 80 percent, falling to 4,685 in June from 22,887 in May.
Tech firms leading job cuts in Corporate America
On Friday, the Department of Labor is set to release monthly unemployment figures and payroll changes. Economists polled by Reuters forecast 225,000 jobs added in June, fewer than the 339,000 added in May, and a drop in the unemployment rate to 3.6% from 3.7 percent.
Slower US job, wage gains expected in May