U.S. Corporate Job Cuts Surge 54%

Elena
03 Oct, 2006
New York City

September''s total job cuts were 40% higher than the 71,836 layoffs recorded in September 2005. The chief executive of the outplacement firm said that the job reductions are closely related to the slowdown in the U.S. economy. Automotive suppliers led the surge in job cuts as they were affected by lower production levels at Ford, General Motors and DaimlerChrysler.

[R]8:30AM U.S. corporate layoffs surged by 54%.[/R]
U.S. corporate layoff announcements jumped 54% to 100,315 in September, marking the highest rise since January, and the second straight month of considerable increase. In July, job cuts totaled just 37,178. September''s total job cuts were 40% higher than the 71,836 layoffs recorded in September 2005. Job-reduction announcements rose 12% in Q3, reaching 202,771 from Q2’s 180,580. For the year to date, layoffs are down 18% to 739,229 from the first nine months of 2005.

The chief executive of the outplacement firm said that the job reductions are closely related to the slowdown in the U.S. economy. Cuts related to the housing slowdown are surfacing at companies such as Pulte Homes ((PHM)) and home improvement retailer Home Depot ((HD)). In addition, consumer-product companies announced 9,031 cuts in September.

In September, the auto industry announced plans to slash 33,745 jobs, the biggest number since January''s 36,299. So far in 2006, 111,642 job cuts have been announced by automakers and auto-parts manufacturers. The automotive cuts were dominated by suppliers, affected by lower production levels at Ford ((F)), General Motors Corp. ((GM)) and DaimlerChrysler ((DCX)).

The computer industry planned to cut 10,600, mostly at Intel ((INTC)). The telecommunications industry announced job reductions of 10,059.


[R]7:30AM A sharp drop in crude-oil prices brought stocks lower in Asia.[/R]
Asian markets finished lower on Tuesday. The Nikkei 225 Average in Japan finished the day 0.08% lower at 16242.09. Sony shed 2.7%, having sunk 5.3% since Thursday on a lot of unwelcome news involving faulty laptop batteries as well as reservations about its flagship games console. Oil stocks also dipped after oil futures slid Monday on U.S. markets. Oil explorer Inpex Holdings dropped 3.9%.

Hang Seng Index in Hong Kong gained 0.36% to close at 17606.53. Recently listed China Merchants Bank surged 6.7%, and China Mobile advanced 1.6%. The advances in the two Chinese firms came after the tightly-controlled yuan has moved up at an unprecedented pace in the past two weeks.

Taipei shed 0.06% to 6956.88 and S&P/ASX 200 in Australia closed 0.11% higher at 5184.30. In Australia, a favorable cocktail of domestic economic data spurred buying of stocks, resulting in the seventh consecutive daily rise by the market. Lower oil prices weighed down energy stocks, as Woodside Petroleum fell 2.9%, but helped airlines gained, as Qantas gained 1.5%.


[R]6:30AM Tech and enegry stocks weigh Europe down on Tuesday.[/R]
European markets were lower by mid morning on Tuesday. The FTSE 100 in London lost 0.5% to 5,927.5, while Frankfurt Xetra Dax fell 0.7% to 5,957.65 and in Paris, the CAC 40 shed 0.7% to 5,206.45.

Decliners

Infineon, the German chipmaker, fell 1.7% after Rabo Securities downgraded the stock. Franco-Italian chipmaker STMicroelectronics shed 1.5% and Dutch chip equipment maker ASML fell 1%.

Oil producers fell after crude prices sank overnight on speculation that US supplies will continue to build in spite of Opec production cuts. Finnish refiner Neste Oil fell 3.2%, while Statoil of Norway fell 2.9%. Total of France shed 1.1 % and Repsol in Spain lost 1.1%.

Spanish property group Metrovacesa gave back some its recent gains as its shares retreated 3.3% and Eon, the German utility, fell 0.8%.

Advancers

Shares of miner Xstrata rose 2.8% after it said that it''s issuing 2.9 billion pounds ($5.5 billion) in discounted shares, to help refinance a $7 billion temporary facility to buy the Canadian miner Falconbridge. Tesco advanced 0.7% after it said that its first-half net profit rose 23%, as revenue from continuing operations rose 20.8%.

Oil and gold

Crude oil for November delivery dropped 54 cents to $60.49 a barrel in electronic trading on the NYME at midday in Europe. November Brent crude at London ICE Futures exchange fell 69 cents to $59.76 a barrel.

Gold slipped as low as $591.70 an ounce and was quoted at $592.80/593.80 in early morning, down from $597.50/598.25 late in New York on Monday.

Currencies

The euro rose to $1.2758, up from $1.2742. The U.S. dollar traded at 117.66 yen, up from 117.60 yen from late Monday. The pound was at 67.59 pence in London, compared with 67.57 pence late yesterday.