By Vicki Needham - 06/05/14 11:33 AM EDT
Job cuts climbed to their highest level in more than a year, but most signs point toward a stronger hiring trend in the coming months, a new report said Thursday.
Employers announced plans to cut payrolls by 52,961 in May, up 31 percent from 40,298 in April, Chicago-based global outplacement firm Challenger, Gray & Christmas reported.
May’s total was 46 percent higher than the 36,398 job cuts announced in May 2013.
Still, layoffs are running behind last year’s totals, and other economic indicators signal stronger growth and hiring for the rest of the year.
"As we approach the midway point of the year, we do not expect a second-half surge in downsizing unless there is a sudden and severe shock to the economy,” said John Challenger, chief executive officer of Challenger, Gray & Christmas.
So far this year, employers have announced a total of 214,600 planned job cuts, which is 2.3 percent fewer than the 219,560 job cuts through the first five months of 2013.
The technology sector reported the heaviest layoffs in May with computer firms planning cuts of 18,799 jobs and leads all others in year-to-date job cuts with 29,863.
Hewlett-Packard recently said it will cut as many 16,000 workers in its efforts to “reengineer the workforce to be more competitive."
“The last time we saw a figure on this scale was February 2013, when JPMorgan Chase announced a large reduction in the number of bankers in its mortgage unit, most of whom were hired in the wake of the recession to deal with the flood of foreclosures and the refinancing of troubled loans,” Challenger said.
"While some industries, including computer, have seen an increase in job cuts, most of last year’s leading job-cut industries have experienced a decline."
The retail sector came in a close second, with 25,696 job cuts announced this year.
Several recent reports suggest continued growth in the coming months.
Factory orders increased for the third consecutive month in April, and automakers are reporting strong sales. Manufacturing and the service sector each grew at a faster pace in May, too.
Also, a recent Bureau of Labor Statistics report showed that 118 metro areas have unemployment rates below 5 percent.
"All of this bodes well for the nation’s job seekers,” Challenger said.