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Layoffs increase, hiring declines in August

Job growth will scale back in August compared with a year ago in the manufacturing and service sectors, and payroll cuts are slowly starting to rise, according to the Society for Human Resource Management's (SHRM) Leading Indicators of National Employment (LINE) survey for August 2011.

The manufacturing hiring index will drop in August on a year-over-year basis by a net of 1.6 points (a net of 35.6 percent of companies will hire in August, compared with a net of 37.2 percent that added jobs a year ago). Service-sector hiring will decrease in August by a net of 19.1 points (a net of only 19.2 percent will add jobs, compared with a net of 38.3 percent that added jobs a year ago).

The LINE results for August 2011 reveal what may be a temporary setback for the labor market’s recovery, and they are in accord with recent federal data. Nonfarm payrolls only grew by 18,000 jobs in June, according to the BLS. Even more troubling for LINE's August report is the rise in layoffs—13.4 percent of manufacturers plan job cuts for the month, up from 7.7 percent a year ago, and the 15.3 percent of planned service-sector layoffs is more than double the rate from August 2010 (6.0 percent).

The full report, which also includes data for recruiting difficulty, new-hire compensation, and vacancies, can be found here.