Tue Jul 6

WASHINGTON (AFP) - US companies trimmed plans for both job cuts and new hires in June, a private survey showed.

Employers announced plans for 64,343 job cuts, down 12 percent from May and the lowest number in a year, according to the survey by outplacement firm Challenger, Gray and Christmas Inc.

At the same time, however, companies slashed hiring plans.

Employers announced plans to hire 38,377 workers in June, down 31 percent from May.

"The decline in June job cuts is good news but it would not be surprising to see a rise in monthly job-cut announcements during the second half of the year," said the firm's chief executive, John Challenger.

"Over the past five years, we have seen job cuts surge in the fourth quarter. If this trend is repeated this year, it could show up in the November elections."

US President George W. Bush is fighting to get re-elected November 2 but has been criticized by Democratic challenger John Kerry over his handling of the economy.

On Friday, the Labor Department announced a shock slump in employment growth in June.

Employers took on an extra 112,000 new jobs in June, less than half the 250,000 predicted by economists, the government said, leaving the unemployment rate stuck at 5.6 percent, unchanged from May.

The news cast doubt over a recent show of strength in the labor market.

Challenger forecast sluggish jobs growth ahead.

"In addition to a possible increase in second-half job cuts, job growth may be slower for the foreseeable future as indicated by the 31-percent drop in announced hiring plans," he said.

"This may occur for two reasons: selectivity and the desire by management to wring the last ounce of productivity from its existing workforce as capturing new business is priority number one."

Challenger said the government's labor force report showed the average job seeker took 20 weeks to find work in June, hardly changed since February despite significant net gains in jobs.

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