Fewer layoffs expected as recession winds down

Fewer layoffs expected in July as recession winds down, but firms show little appetite to hire

WASHINGTON (AP) -- First, the good news. Workers probably got slapped with fewer pink slips in July as the worst recession since World War II winds down.

Now, the reality check. A paucity of job openings means nearly 15 million unemployed Americans are still looking for jobs, and their ranks are likely to keep growing into 2010.

Labor Department data due out Friday is expected to show job losses slowing in July to a pace of around 320,000, with unemployment rising to 9.6 percent, up from 9.5 percent the previous month. If the job-loss estimate is on target, it would be a heartening improvement from June's 467,000 job losses -- and the slowest pace for job losses since August 2008.

Slower job losses are anticipated because companies aren't cutting investment and spending as drastically as they had been during the depths of the recession which came in the final quarter of last year and carried over into the first quarter of this year. And, recent barometers have shown some improvements in manufacturing, housing and construction activity.

The government reported last week that the economy shrank at a pace of just 1 percent from April-to-June, the strongest signal yet that the recession may be ending.

Many analysts predict the economy could start growing again in the current July-to-September quarter. And, the Fed recently observed that the economy is finally showing signs of stabilizing in some regions of the country -- especially in parts of the Northeast and Midwest -- bolstering hopes of a broader-based recovery this year.

However, the anticipated slowdown in layoffs won't prevent the unemployment rate from rising for the 10th month in a row and to the highest level in 26 years.

The good news, bad news picture in the labor market suggests that employers are feeling more comfortable about slowing down firings but still aren't ready to ramp up hirings.

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