While workers at American Express Co., EBay Inc. and U.S. Steel Corp. have every reason to shudder at the announcements that their employers will be cutting hundreds, or even thousands, of jobs, those advisories rarely alter the overall outlook for the U.S. economy.
"You always want to take them with a grain of salt," said Ryan Sweet, senior economist at Moody's Analytics Inc. "Businesses can say one thing and do another down the road. It doesn't shake our confidence."
Staff reductions sometimes fail to materialize because business improves, or cuts are carried out through attrition, or affect employees are based in other countries or shift to different jobs. Unless jobless claims rise, the announcements rarely mean the economy is in dire straits.
New York-based Amex, the biggest credit-card issuer by consumer spending, said last Wednesday that it would cut more than 4,000 positions this year after reporting a fourth-quarter profit that missed some analysts' estimates.
Chief Financial Officer Jeff Campbell said on a conference call with analysts Wednesday that head count won't decline by 4,000 because new jobs will be created elsewhere in the company.
On the same day, San Jose, Calif.-based EBay said it's cutting staff by 2,400, or 7 percent. But the cuts reflect its issues with competition and cyber security, not economic growth.
These are "big layoffs from some pretty well-known consumer-facing companies and I think it does draw a lot of headlines," said Sarah House, an economist at Wells Fargo Securities LLC in Charlotte, N.C. Data such as jobless claims "are more indicative of the broader economy."
A report from the Labor Department showed jobless claims decreased by 10,000 to 307,000 in the week ended Jan. 17. Such low levels still point to a strengthening job market.