Unemployment may have increased to 6.1 percent in May -- its highest level since April, 1994 -- and it may even increase again in June and July. The high-tech sector, reeling from being slammed in the past few years, is still taking a hit.
But the hits aren't as hard as they have been.
That's the word coming down from Challenger, Gray & Christmas, the Chicago-based outplacement firm that tracks job cuts and hiring trends. Analysts there say despite the continuing layoffs, there are mounting signs that the economy and job market could begin to show signs of a rebound by late 2003.
''While we have seen some significant job cuts in the fist half of the year, the overall trend has been downward, culminating in a May figure that fell to a 30-month low,'' says John Challenger, CEO of the outplacement company. ''Historically, May has been a low job-cut month. However, the significant drop this year is perhaps indicative of what we can expect in the months to come. When we look at the bigger job-cut picture, though, it is clear that downsizing is on the decline.''
Telecommunications and the computer sector announced 54,278 job cuts from January through May. That is 67 percent fewer cuts than the 165,391 logged in the same period last year, reports Challenger, Gray & Christmas.
In the overall U.S. job market, the 12-month average shows a steady decline from 174,127 job cuts per month in February, 2002 to the current average of 113,426 layoffs per month. In 12 of the last 15 months, the monthly job cut total has been below the figure recorded in the same month a year earlier by an average of 34 percent.
''The decline is, of course, good news because it means fewer people are losing their jobs,'' says Challenger. ''But, more importantly, since job cuts provide a fairly accurate picture of how companies perceive the business climate about six months from now, the decline suggests that employers are gaining confidence in the economy.''