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Economy in Brief

Challenger Layoffs Retreated
by Tom Moeller February 2, 2006

Challenger, Grey & Christmas reported that January job cut announcements reversed about half of the rise in December and fell 4.0% to 103,466.

Like the December report, one industry dominated the monthly total. Auto industry layoff announcements rose nearly ten fold from December on the heels of a December report when layoffs in government rose more than three times (reversed in January). Layoffs in the retail industry also surged m/m and were more than three times higher than last January.

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

Challenger also reported the second consecutive sharp m/m drop in announced hiring plans and they were down 53.3% from a year ago.

Challenger, Gray & Christmas Jan Dec Y/Y 2005 2004 2003
Announced Job Cuts 103,466 107,822 12.0% 1,072,054 1,039,935 1,236,426
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