Chicago-based Challenger, Gray & Christmas Inc. said today that job cuts fell to 71,739 last month from 100,315 in September 2006 — certainly an interesting result. The firm said that fewer firings in automakers and parts suppliers contributed to the overall improvement. That’s not to say the impact of mortgage job losses isn’t being felt, and won’t hurt overall numbers at some point in the future. From Bloomberg:

“The dominos are likely to continue toppling as home values fall and foreclosures continue to climb,” John A. Challenger, chief executive officer of the placement company, said in a statement. “Even if the worst of the crisis is over, as some are saying, we could continue to see heavy job cuts in the financial sector through the end of the year.” Over August and September, 82 percent of the announced job cuts in the financial industry were from mortgage and subprime lenders, Challenger said. Reductions are spreading to related areas, like insurance and consumer products, Challenger said. Overall, financial institutions have announced 129,927 job cuts so far this year, compared with 34,903 in the same period last year.

For a look at mortgage-related job losses, Reuters has put together a pretty good fact box. On a related note, the ISM index that serves as a barometer for service industry performace, was released today. It showed that service growth continued in September, a sign that the housing slump has not yet halted six years’ worth of growth in what amounts to 90 percent of the nation’s economy. From Bloomberg, again:

“The economy does not seem to be slipping into a full-blown contraction,” said David Resler, chief economist at Nomura Securities International Inc. in New York. The institute’s index of new orders for non-manufacturing industries dropped to 53.4 from 57 the prior month. “It boils down to how much further will housing disrupt the rest of the economy,” said Drew Matus, senior economist at Lehman Brothers Holdings Inc. in New York. “Other sectors of the economy will do well enough to keep us from falling into a recession, but not enough to suggest that there’ll be robust growth going forward.”

My concern here is that we haven’t really seen housing at its worst yet — most in the industry know that there are many more foreclosures ahead. (If you haven’t seen BofA’s updated reset chart, now would be a good time to do so.)