October 6, 2003,
Layoff pace slackens in September
U.S. companies continued to downsize and shuck off jobs in September, but at a somewhat slower pace than during the past several months, said Challenger, Gray & Christmas, a Chicago-based international outplacement firm that tracks layoff announcements nationwide.
In another hopeful sign, job cuts for the entire third quarter of this year, 241,548, were 10 percent beneath last year's total of 269,090 during the same three-month period. That's the lowest quarterly figure since the fourth quarter of 2000, when employers announced just over 220,000 job cuts.
And for all of this year, job cuts are running about 16 percent beneath year-ago levels, with 872,080 announced layoffs, compared with more than a million through the first nine months of 2002.
"Frankly, the September decline was somewhat surprising, considering that the last four months of the year historically have been the heaviest, as employers finalize budgets and business plans for the coming year," said John Challenger, ceo of the outplacement company. "It is probably too early to break out the champagne, however. After all, we saw a relatively low figure last September and employers went on to announce more than 426,000 job cuts in the last three months of the year."
Indeed, job cuts historically outnumber both summer and spring layoffs by a substantial margin, the company reported. "From 1995 to 2002, job cuts announced during the last four months outnumbered summer job cuts — May through August — by 36 percent. During the same eight-year period, layoffs during the closing four months of the year were also 15 percent higher than those announced between January and April.
Credit managers see economy improving
The National Association of Credit Management, Columbia, MD, said its latest monthly reading of the nation's credit and collection managers shows the nation's business economy continues to improve, getting a big assist from a reviving manufacturing sector.
The monthly Credit Managers Index for September, a monthly look at the business economy through the eyes of corporate credit managers and collectors, climbed by 2.2 percent during September, and is now at its highest level since April.
"The improvement is driven by the manufacturing sector, which jumped 5.2 percent over its August level," said the group. "The manufacturing reading of 58.4 is the highest it has been since May 2002. Last month's improvement in this index was its first uptick since April 2003. It appears the manufacturing sector is well into recovery and renewed strength."
But the nation's service sector "is still showing signs of slowing growth," the group said. "Although its growth remains strong, the service sector is slowing on a month-over-month basis." In August, after showing seven consecutive months of improvement, the service sector index lost ground, and slipped again in September.
The survey asks credit managers to rate favorable and unfavorable factors in their monthly business cycle. Favorable factors include sales, new credit applications, dollar collections and amount of credit extended. Unfavorable factors include rejections of credit applications, accounts placed for collections, dollar amounts of receivables beyond terms and filings for bankruptcies.