U.S. employment is still not robust, but job cuts are slowing, according to two reports released Wednesday.  

Private sector employment fell by 203,000 in October, according to a report released Wednesday by Automatic Data Processing Inc.  It was the seventh month in a row that the decline in employment was less than in the previous month.  

Meanwhile, the number of planned job cuts announced by U.S employers declined for the third consecutive month in October, falling 16 percent to 55,679 from 66,404 in September, according to figures by Chicago-based Challenger, Gray & Christmas, Inc. 

Adolfo L. Laurenti, chief economist at Mesirow Financial Inc., said the slowing rate of job cuts indicates that the economy is starting to improve.  However, he said 203,000 job cuts for October is still too high.  Higher employment is essential for recovery Laurenti added.  

“In order to increase spending, people need to have jobs,” he said.  “A healthy economy depends on income generation.  Even if job numbers do not show in GDP indicators, they are key.”

Carl Campbell, an economist at Northern Illinois University, said although the two reports show that the economy is starting to stabilize, it may take a while for the U.S. to see strong employment numbers.  

“Unemployment is a lagging indicator,” he said.  “When companies start to recover hiring more employees comes later, it’s very expensive to add new employees.”  

Illinois ranked the highest in job-cut announcements in the Midwest at 3,863, according to Challenger, Gray & Christmas.  Michigan had one of the lowest job-cut announcements in the Midwest at 82.  

Edward Stuart, an economist at Northeastern Illinois University, said Illinois’ large population explains why its job cuts numbers were the highest in the Midwest.  He said Michigan’s low job cuts are due to sharper job losses earlier in 2009 with layoffs from the automative industry and the housing crash impacting the state severely.

“There is not a lot of room to cut more (employees) in Michigan,” he added.

Michigan's unemployment rate is roughly 15 percent, the highest in the US, compared with 10.5 percent in Illinois.

Campbell said the most important factor to recovery is growing GDP.  He predicted strong employment numbers will show in the latter half of 2010.

“For American workers it’s important to get back to 4 to 5 percent unemployment, it’s important on the personal level and psychologically,” he said.  “But that will take awhile.”