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Economy in Brief

Challenger Layoffs Up Slightly
by Tom Moeller October 5, 2005

Challenger, Grey & Christmas reported that job cut announcements rose a slight 1.8% in September to 71,836 following a 31.5% m/m drop during August. The three month average of job cut announcements fell 13.8% to 81,793 (-2.5% y/y).

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.

Moderate increases in job cut announcements were scattered throughout industry but large m/m increases in retail (688.4% y/y), consumer goods (-21.3% y/y) and electronics (72.8% y/y) were offset by declines in insurance (20.4% y/y), telecommunications (-91.3% y/y) and pharmaceuticals (67.5% y/y).

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 sharply m/m (-3.1% y/y).

Challenger, Gray & Christmas Sept Aug Y/Y 2004 2003 2002
Announced Job Cuts 71,836 70,571 -33.4% 1,039,175 1,236,426 1,431,052
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