This is a big week for the U.S. job market. Tomorrow, the Bureau of Labor Statistics will release the latest unemployment numbers for January. And today, another employment indicator is presaging good things to come.
John Challenger is CEO of Challenger, Gray and Christmas, a firm that finds new jobs for laid-off workers and tracks layoffs around the country. Today, it released a new report showing that layoffs in January were up 24 percent from December. But the underlying details tell a different story.
"The nation's employers announced plans to cut payrolls by 40,430 jobs in January," says Challenger. "That was down 24 percent from what we saw in January a year ago. In fact, it was the third lowest January total we've seen since 1993. Often January is a very heavy time for layoffs, so it does suggest strength in the economy."
Challenger says the bulk of the layoffs in January came in the financial and retail sectors. He adds that many companies are moving away from brick-and-mortar stores and are instead increasing their digital assets, a decision that's having a big impact on the job market.
"One of the big cuts of the month was Blockbuster, that finally closed their remaining stores, which impacted 3,000 workers. You know that that's been affected ... by the move to online movie access by its customers," he says.
But Challenger is optimistic about tomorrow's unemployment news.
"We're expecting that the economy will continue to create strong jobs. We created 1.5 million jobs in the last year, in fact 2.5 million more people are working now. So we expect that trend will continue to slowly but steadily and consistantly drive unemployment down," he says.
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