Fair use for educational/research purposes only

January Layoffs Grew to Highest Total in 8 Years

(2/6/01 1:33:51 PM PT)

NEW YORK -- Layoffs and job cuts in the U.S. surged in January to their highest level in eight years, according to a national survey released Tuesday.

Job cuts for January totaled 142,208, compared with 133,713 in December, the firm said.

The number of job cuts last month jumped more than 6% from the December total, according to Challenger, Gray & Christmas Inc. The job-placement firm attributed the rise to sharp cutbacks in the automotive industry and high-tech areas.

The report offers yet another sign that the economy is slowing and may provide some impetus for further easing by the Federal Reserve. It also gives President George W. Bush another trouble sign to point to, as he prods Congress to enact his $1.6 trillion tax-cut package.

The automotive sector posted the highest number of job cuts, with 34,959 announced. Together, however, telecommunications, e-commerce and computer companies posted 44,851 cuts in January.

In the two-month period from December to January, job cuts totaled 275,921 -- or nearly 41% the number of layoffs for all of 1998. In that year, job cuts hit a record 677,795.

Challenger, Gray & Christmas tracks layoff announcements and releases its Challenger Employment report monthly.

In announcing its latest rate cuts last week, the Fed noted that consumer and business confidence had eroded further since its rate reductions of Jan. 3. In response, manufacturing production has been cut back sharply,' the statement said. 'Taken together, and with inflation contained, these circumstances have called for a rapid and forceful response of monetary policy.'

On Jan. 31, policy makers cut the federal-funds rate -- which banks charge each other for overnight loans -- to 5.5%. They also reduced the largely symbolic discount rate -- used for direct loans to banks from the Fed -- to 5%.

Copyright (c) 2001 Dow Jones & Company, Inc.

http://dowjones.work.com/index.asp?layout=print&doc_id=33649&gif=dj-big

-- Martin Thompson (mthom1927@aol.com), February 06, 2001