Jobs picture expected to improve
NEW YORK — A rash of job cuts — more than 16,000 layoffs just this week from a handful of companies, including AT&T Corp. — have created some gloom on the jobs front.
But today’s release of jobs data for September was expected to show a steady unemployment rate and creation between about 50,000 to 250,000 new jobs, though uncertainties such as the effects of last month’s hurricanes kept the estimates all over the map, said Wachovia Corp. economist Mark Vitner.
“It’s an unusually wide range, because there are so many complicating factors this month,” he said. “It’s all over the board.”
Vitner predicts the Labor Department data to fall in the upper stratum of that range, partly because most job losses due to the recent hurricanes were in the agricultural sector. Friday’s data will include only nonfarm payrolls.
Others were more measured.
Dow Jones Newswires’ estimate from a survey of economists is for about the middle of that range, calling for 145,000 new jobs, on top of 144,000 in August.
“I think they’re too optimistic,” said John Challenger, CEO of Challenger, Gray & Christmas Inc. The job placement and research company’s report Tuesday on corporate downsizing showed more than 100,000 announced job cuts in September, and Challenger added there was little evidence of job creation that month.
The market expects the unemployment rate, a Labor Department survey of about 60,000 households, to hold steady from last month at 5.4 percent.
On Thursday, the Labor Department reported that the number of new people signing up for unemployment insurance benefits fell by a seasonally adjusted 37,000 to 335,000, the lowest level since the beginning of September. In the prior three weeks, claims had gone up. Economists were expecting claims to decline to around 355,000.
Sandra Pianalto, president of the Federal Reserve Bank of Cleveland and a member of the interest rate policy setting Federal Open Market Committee, said Thursday said the labor outlook was still unclear.
“As the unemployment data arrives over the next several months, we may very well see the job numbers snap back if confidence in our economy is restored, economies around the world strengthen and energy prices stabilize,” Pianalto said. “But it may turn out that the process of job expansion will take more time to gain momentum.”
A sampling of mass layoffs announced this week:
• AT&T is cutting 7,400 more jobs as part of the company’s plan to retreat from the traditional consumer telephone business. The company announced Thursday that it now plans to shrink its work force by a fifth, or about 12,300 jobs, during 2004 — up from a previous target of about 4,900 jobs.
• Bank of America Corp. said Thursday it will cut about 4,500 jobs, or about 2.5 percent of its work force, beginning this month as a result of its merger with FleetBoston Financial Corp.
• Unisys Corp. said Wednesday it plans to cut 1,400 jobs, or nearly 4 percent of its work force.
• Hedstrom Corp., which makes children’s toy and leisure products, discontinued operations Wednesday and laid off more than 800 employees.