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August 07, 2002
Job Cut Announcements Drop in July
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Company announcements of job cuts fell to the lowest level in 14 months in July, a report showed Monday.
Companies announced slightly fewer than 81,000 layoffs in July, a 15 percent decrease from June, when 94,700 jobs were cut, according to outplacement firm Challenger, Gray & Christmas. But Reuters reported that, while job cuts didn't increase, only 6,000 jobs were created in July.
"While it is a positive sign that job cuts have slowed so significantly, the news is weakened by the fact that the economy seems to be in a no-growth state," John Challenger, chief executive of Challenger Gray, told Reuters.
He added, "Combined with the fact that wages are at a virtual stand-still, the economy is in a dangerous state, one that is ripe for a significant slowdown in consumer spending and at high risk of dipping back into recession."
While the unemployment rate remained at 5.9 percent, unchanged from June, July payroll gains did not meet economist's expectations. Reuters reports that economists may be worried that the stock market slide was having a negative impact on business decisions.