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Economy in Brief

Challenger Layoffs Higher in May
by Tom Moeller June 2, 2005

Job cut announcements jumped in May, however, the 42.2% m/m rise did not reverse all of the prior month's plunge. Therefore, the three month average of job cut announcements fell further to the lowest level since last August.

During the last ten years there has been an 84% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.

Job cut announcements rose sharply m/m in the apparel (+234% y/y), computer (496% y/y) and insurance (321% y/y) industries but fell broadly elsewhere.

Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.

Challenger also reported that announced hiring plans fell for the second month in the last three.

Challenger, Gray & Christmas May April Y/Y 2004 2003 2002
Announced Job Cuts 82,283 57,861 12.2% 1,039,175 1,236,426 1,431,052
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