When it comes to the employment outlook, the private sector name to know is Challenger, Gray & Christmas. The Chicago-based outplacement and consulting firm offers this look ahead for the 2010 job market. The overview: positive news but tempered with a great deal of caution.
After starting the year with the heaviest downsizing in nearly a decade, the number of announced job cuts declined dramatically in the second half of 2009, providing hope for an eventual job-market turnaround. The turnaround should become more evident in 2010, as job creation finally begins to outpace job losses.
However, while hiring is expected to accelerate in the new year, unemployment could remain stubbornly high, as millions of Americans who abandoned the job search out of frustration – and, therefore, not counted among the unemployed – reenter the labor pool.
The economy is just beginning to pull out of the worst economic downturn in decades. Since the recession began in December 2007, employers have announced nearly 2.5 million job cuts. The heaviest downsizing occurred between July 2008 and June 2009, with more than 1.6 million job cuts announced.
Job cuts appear to have peaked in January 2009, reaching 241,729, the highest monthly total since January 2002. In the months to follow, announced layoffs steadily declined, but the monthly average remained above 130,000 through the first half of the year. Since July 1, however, monthly job-cut announcements have averaged about 69,000. In November, job cuts fell to 50,349, the lowest monthly total since December 2007.
“The end of the year is typically when we see a surge in layoff activity. The fact that job cuts continued to decline in the fourth quarter is a good sign that the job market has truly started the recovery process. Unfortunately, the recovery process is slow, so it could be several months or even years before unemployment returns to pre-recession levels,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
There were approximately 15.4 million unemployed Americans in November, up from 7.2 million in November 2007, just before the recession began. In addition to the unemployed, there were 6.0 million Americans in November who want a job but were not considered part of the labor force because they had not sought employment for at least four weeks. That figure is up from 4.2 million in November 2007.
According to Challenger, some of the areas that will begin to see renewed job creation in the new year include health care, information technology, government, financial services and energy.