Huge layoffs in the retail and energy sectors led to a 218 percent jump in January job cuts, while poor manufacturing orders and higher-than-expected jobless claims increase anxiety over the U.S. economy.
U.S. employers posted 75,114 planned job cuts in January — after a 15-year low of only 23,622 cuts in December. In the monthly report from global outplacement firm Challenger, Gray and Christmas, layoffs jumped 42 percent from last January’s numbers, the month’s largest increase since the financial crisis.
“Despite relatively strong holiday sales to close out 2015, retailers led all other industries in January job cuts, announcing plans to cut 22,246 jobs from their payrolls,” the Thursday report stated. “That was the highest retail total since January 2009, when retailers announced 53,968 planned layoffs.”
Walmart and Macy’s accounted for the bulk of the retail layoffs, with Walmart announcing 269 store closures nationwide, affecting an estimated 16,000 workers. Macy’s has also been forced to close stores across the U.S., posting roughly 5,000 planned job cuts, Business Insider reported.
The continued effects of globally cheap oil and declining energy demands took their toll on the energy sector, which slashed 20,246 jobs in January. This sector posted similarly high numbers in December, and the future outlook does not look promising as oil continues to hover around $30 dollars a barrel. (RELATED: Oil Prices Dip, Creating Massive Spike In Crude Inventories)
“The pace of downsizing in the energy sector ebbed in the second half of 2015, but the latest activity, which included more cuts from Halliburton and Schlumberger, is evidence the industry is far from concluding its cost-cutting initiatives,” John A. Challenger, chief executive officer of Challenger, Gray & Christmas, said in the report. “With oil prices expected to stay low for the foreseeable future, the potential for continued layoffs remains elevated.”
In more bad news for the U.S. economy, the Department of Commerce revealed that factory orders sank 2.9 percent in December, worse than expected. Orders for manufactured goods have dropped four of the last five months, according to Market Watch.
Global stock markets were also slaughtered in January due to swings in oil prices and the deterioration of growth in China. Initial jobless claims posted Thursday rose to 285,000 — higher than anticipated — causing anxiety for investors ahead of this Friday’s labor report. The volatile markets may also halt the Federal Reserve’s plans to raise interest rates for a second time in March.
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