Higher fuel prices are causing real pain nationwide, as transportation and consumer goods sectors saw the most layoffs in February, according to the most recent survey by outplacement firm Challenger, Gray & Christmas.
Overall, the pace of downsizing is up 18 percent over last year, with 105,214 job cuts announced through the first two months, compared to 89,221 during the same period in 2011. Last year, job cuts in the first two months were dominated by the government, but that has trailed off significantly. This year consumer products firms are leading all others in job cuts, followed by transportation companies. They account for 32,155 job cuts nationwide or 30.6 percent of the year-to-date total.
“It is too soon to say that the government sector is out of the woods when it comes to layoffs. However, recent gains in employment across many states are undoubtedly helping to boost payroll tax revenue. Furthermore, many states and local municipalities have already cut to the bone and may have little room for additional cuts. The biggest threat for increased government job cuts remains the federal government, which is still under pressure to cut deficits and bring spending under control,” said John A. Challenger, CEO of Challenger, Gray & Christmas.
“While, the decline in government job cuts is certainly promising, surging job cuts in consumer products and transportation are particularly worrisome. These are strong indicators of economic health, especially as it relates to consumer spending. Both sectors are undoubtedly feeling the impact of rising fuel prices as heavy users of fuel, but also from their dependency on consumers, who are being forced to spend more on gasoline and less on the products and services provided by these firms.”