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Economy in Brief

Challenger Layoffs Slipped
by Tom Moeller August 3, 2005

Challenger, Grey & Christmas reported that job cut announcements fell 7.2% in July to 102,971 but that followed sharp gains both in May (42.2%) and June (34.9%). The three month average of job cut announcements rose to the highest level (98,750) since February.

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 in the automotive industry fell sharply after increasing ten-fold in June. Job cuts also fell in the chemical and pharmaceutical industries but increases were quite strong in the financial, insurance, electronics and computer industries.

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

Challenger also reported that announced hiring plans rose (1.1% y/y).

Challenger, Gray & Christmas July June Y/Y 2004 2003 2002
Announced Job Cuts 102,971 110,996 48.0% 1,039,175 1,236,426 1,431,052
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