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Layoffs precede jobs data

By MADLEN READ
The Associated Press

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Today's release of jobs data for September is expected to show a steady unemployment rate and between about 50,000 to 250,000 new jobs created, though uncertainties such as the effects of last month's hurricanes kept the estimates all over the map, said Wachovia economist Mark Vitner.

"It's an unusually wide range, because there are so many complicating factors this month," he said.

Vitner predicts the Labor Department data, the last jobs report before the Nov. 2 election, to fall in the upper stratum of that range, partly because most job losses due to the hurricanes were in the agricultural sector. Today's data will include only nonfarm payrolls.

Others were more measured.

Dow Jones Newswires' estimate from a survey of economists is for about the middle of that range, calling for 145,000 new jobs, on top of 144,000 in August.

"I think they're too optimistic," said John Challenger, chief executive of Challenger, Gray & Christmas. The job-placement and research company's report Tuesday on corporate downsizing showed more than 100,000 announced job cuts in September; Challenger added there was little evidence of job creation that month.

The market expects the unemployment rate, a Labor Department survey of about 60,000 households, to hold steady from last month at 5.4 percent.

Yesterday, the Labor Department reported that the number of new people signing up for unemployment-insurance benefits fell by a seasonally adjusted 37,000 to 335,000, the lowest level since the beginning of September. Claims had gone up in the previous three weeks.

Economists were expecting the new claims to decline to around 355,000.

Sandra Pianalto, president of the Federal Reserve Bank of Cleveland and a member of the interest-rate policy-setting Federal Open Market Committee, said the labor outlook was still unclear.
 
"As the unemployment data arrives over the next several months, we may very well see the job numbers snap back if confidence in our economy is restored, economies around the world strengthen and energy prices stabilize," Pianalto said.

"But it may turn out that the process of job expansion will take more time to gain momentum."

The jobs data come on top of several layoff announcements this week from companies such as Bank of America and Unisys.

"There's an awful lot of churning that goes on in the labor market," Vitner said, adding that while the overall economic picture is far from rosy, the number of job openings has nevertheless increased by more than 10 percent in the past year.

A sampling of mass layoffs announced this week:

• AT&T is cutting 7,400 more jobs as part of its plan to retreat from the traditional consumer telephone business. The company announced yesterday it now plans to shrink its work force by a fifth, or about 12,500 jobs, during 2004, up from a previous target of about 4,900 jobs.

In addition to layoffs, AT&T said will write down assets equaling $11.4 billion — about a quarter of the company's assets — to reflect the reduced value of AT&T's network now that it will be carrying less consumer voice traffic.

• Bank of America said yesterday it will cut about 4,500 jobs, or about 2.5 percent of its work force, beginning this month as a result of its merger with FleetBoston Financial.

A spokeswoman for the bank, Alex Trower, said the reductions will be largely concentrated in support areas, such as finance, marketing and operations. The cuts are expected to have little impact among workers who deal directly with customers, such as tellers, Trower said.

It was unclear how many layoffs might occur in Washington state. Trower said the company won't divulge specifics by region, and that the cuts will be "across our geographic footprint."

• Unisys said Wednesday it plans to cut 1,400 jobs, or nearly 4 percent of its work force.

• Hedstrom, which makes children's toy and leisure products, discontinued operations Wednesday and laid off more than 800 employees.

• Eastman Kodak said Tuesday it will cut nearly 900 jobs at three of its manufacturing facilities in Europe as part of its shift from traditional film production to digital photography.

• Temple-Inland, which makes packaging and building materials, said Monday it will slash 1,500 jobs and take a third-quarter charge to sell its third-party mortgage-servicing portfolio and reposition its mortgage-origination activities.

Material from Seattle Times business staff is included in this report.