Pink slips were in the wind during June as employers announced plans to cut payrolls by 38,536 jobs.
While that's up 28% from May, when firings fell to a five-month low in June, it's still well below the 12-month average of 53,049 monthly job cuts. And according to outplacement consultancy Challenger, Gray & Christmas, which tracks job cuts, it indicates a positive employment environment.
“Job cut announcements were up last month, but they increased from the lowest total of the year to the second lowest of the year,” said John A. Challenger, CEO of Challenger, Gray & Christmas.
The June total is 26% lower than the monthly job cuts averaged over the past year and 14% below the same month a year earlier.
A slowing pace
While the total of 313,754 planned job cuts so far this year is up 9% from the first six months of 2015, the pace of job cutting has slowed significantly since the beginning of the year. Job cuts in the second quarter were down 27% from the first quarter and 10% lower than the second quarter of 2015.
“It is not unusual to see a slowdown in job cuts during the summer months,” said Challenger. “Other factors are definitely contributing to the decline, the biggest one being the precipitous drop off in job cuts attributed to low oil prices.”
Firms in the energy and industrial goods sectors blamed oil prices for 50,053 announced job cuts in the first quarter. In the second quarter, oil-related job cuts were down 48%. In the energy sector alone, job cuts declined 42% in the second quarter.
More of the same
Challenger said we may continue to see low job cut totals throughout the remainder of 2016, as employers take a wait-and-see stance on workforce levels.
“Several uncertainties, including national elections, the recent Brexit, and global security and economic issues are giving employers pause when it comes to workforce decisions," he noted, adding “We are seeing it in layoff numbers, as well as the job creation numbers, which have been lackluster in recent months.”
Not every sector is holding off on job cuts. Terminations in the computer industry increased in the second quarter and total 39,589 through the first half of the year -- more than triple the number announced by these firms in the first six months of 2015.
Another big drop in the number of initial jobless claims last week.
The Department of Labor (DOL) reports the seasonally adjusted total of first-time applications for state unemployment benefits initial claims was 254,000 in the week ending July 2, down 16,000 from the previous week, when the level was revised upward by 2,000.
Initial claims have now been below 300,000 for 70 weeks in a row, the longest stretch since 1973.
The four-week moving average, which many economists believe better reflects the labor market because it lacks volatility, was down 2,500 from a week earlier to 264,750.
The complete report may be found on the DOL website.