Employers in the U.S. announced fewer job cuts in March than ayear earlier, another sign of healing in the labor market.

Planned firings fell by 8.8 percent from March 2011 to a10-month low of 37,880, according to figures released today byChicago-based job placement firm Challenger, Gray & ChristmasInc. Job cuts at government and nonprofit agencies were down 86percent last quarter compared with the same period in 2011, thereport showed.

Dismissals are waning as employers become more optimistic aboutthe economic outlook. At the same time, rising gasoline prices posea risk to consumer spending, which accounts for about 70 percent ofthe world's largest economy.

“Both consumer products and transportation saw fewer job cuts inMarch after experiencing heavy cuts in February,” John A.Challenger, chief executive officer of Challenger, Gray &Christmas, said in a statement. “These are key indicators of theeconomy's health.”

Compared with February, announcements fell 27 percent. Becausethe figures aren't adjusted for seasonal effects, economists preferto focus on year-over-year changes rather than monthly numbers.

Telecommunications firms led all industries with 4,089 announcedjob cuts in March, with almost half coming from T-Mobile USA Inc.,followed by 3,733 dismissals in education.

California led all states with 3,904 announced job cuts. NorthCarolina followed with 3,717 reductions, while Washington state had3,208 firings.

Employers announced plans to take on 12,390 workers, up from10,720 the prior month, the report said.

The Labor Department tomorrow may report payrolls climbed by205,000 workers in March following a 227,000 increase in February,according to the median forecast of economists surveyed byBloomberg News. The unemployment rate probably held at 8.3percent.

Challenger's data do not always correlate with figures onpayrolls or first-time jobless claims as reported by thegovernment. Many job cuts are carried out through attrition orearly retirement. Some employees whose jobs are eliminated findwork elsewhere in their companies, and many announced staffreductions never take place because business improves. The totalsalso include foreign affiliates.

Bloomberg News

Copyright 2018 Bloomberg. All rightsreserved. This material may not be published, broadcast, rewritten,or redistributed.