The drop in the number of Americans seeking unemployment benefits is an indication of fewer layoffs and hence, increased hiring. However, layoffs are only a part of the equation; employer confidence in the economy also plays an important role in making hiring decisions.
According to the Labor Department, applications for benefits dropped by 16,000 with the four-week moving average declining 4,500 to 357,500.
Layoff consultant, Challenger, Gray and Christmas Inc. announced that layoffs by U.S. employers dropped 23% month-over-month in April 2013, the lowest level since December 2012. Employers cut 183,162 jobs in the first quarter of 2013 of which April job cuts totaled 38,121 and March job cuts equaled 49,255.
However, while companies have been advertising for jobs, they have been slow to fill them due to difficulty in finding appropriate talent. Job openings for non-farm employment jumped 11% from February 2012 to February 2013, but the number of people hired declined.
Of the layoffs, the retail sector had the highest number of job cuts in April with 5,897 layoffs. The largest retail job cut came from the closing of the Sears Holdings Corp. (SHLD) and Wal-Mart Stores Inc. (WMT) Portrait Studios, operated by CPI Inc.
Government spending cuts also contributed to layoffs, as reflected in the healthcare, industrial goods, transportation, and aerospace and defense industries (13,766 jobs cut in April).
Change in Employment
Change in Employment, March – April 2013
Total nonfarm payroll employment rose by 165,000 in April, with job increases in professional and business services, food services and drinking places, retail trade, and health care. Employment growth averaged 169,000 per month over the past year.
The professional and business service sector added 73,000 jobs in April for an addition of 587,000 jobs over the past year. Employment also increased in temporary help services with 31,000 jobs.
Retail trade saw a growth of 29,000 jobs in April. The industry added an average of 21,000 jobs per month in the past year. General merchandise stores and health and personal care stores made up much of this growth at 15,000 and 5,000 jobs added respectively.
The healthcare sector added 19,000 jobs in April. Within the industry, employment in ambulatory health care services created the most jobs (14,000).
There was little change over the month in construction, while manufacturing employment was unchanged.