Job Losses Continue-But at a Slower Pace

Employment data for the month of July has been released, and it appears that the private sector lost 371,000 jobs . However, even though last month’s job losses are troubling, they do come with something of a silver lining: The pace of job loss is slowing . July saw the smallest decline in unemployment in nine months. This is an indicator that the economy could be slowly turning around.

Unfortunately, there are signs that August may see an uptick in the pace of unemployment. While fewer jobs were shed in July, there were also announcements of larger layoffs . CNN Money reports on the expected job cuts going forward :

Separately, outplacement firm Challenger, Gray & Christmas Inc. reported that the number of job cuts announced in July spiked 31% to 97,373 , bouncing off a 15-month low in June. July marked the first increase in monthly job cuts since January.

These job cut announcements are going a long way toward the bottom lines of companies, but doing little to help the economic recovery . Indeed, there are concerns that continued job cuts could further stunt efforts to pull the economy out of recession and turn things around.

In any case, businesses should be prepared for a long road to recovery . Something of this magnitude doesn’t just disappear in a matter of months. Businesses should plan for an economic recovery to take as much as one to two years, and prepare finances accordingly. Unfortunately, this may mean cutting hours and benefits — or even continuing layoffs. It’s a somewhat vicious cycle.

Image source: Daylife