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Economy in Brief

Challenger Layoffs Skid Further
by Tom Moeller April 4, 2006

Announced job cuts fell another 25.7% m/m during March on top of the 15.5% February decline, according to the Challenger, Grey & Christmas survey. The decline was to the lowest level in nearly one year

During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.

Layoffs in the auto industry dropped sharply for the second month after the January surge but the three month average remained quite elevated. Cuts in financial (-21.7 y/y, electronics (-37.7% y/y) and government (-72.0% y/y) also fell sharply. Announced job cuts in the apparel and chemical industries, however, surged.

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

Challenger also reported an increase in announced hiring plans (31.7% y/y) after three months of decline.

Challenger, Gray & Christmas Mar Feb Y/Y 2005 2004 2003
Announced Job Cuts 64,975 87,437 -24.8% 1,072,054 1,039,935 1,236,426
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