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Economy in Brief

Challenger Layoffs Lower Still
by Tom Moeller May 2, 2006

Announced job cuts fell another 8.1% last month on top of the 25.7% m/m decline during March, according to the Challenger, Grey & Christmas survey. The decline was to the lowest level since last April.

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 apparel industry dropped sharply (-52.2% y/y) as did job cuts in financial (-37.8 y/y, industrial goods (-5.5% y/y), pharmaceutical (-67.3% y/y) and retail (-82.6% y/y). Announced job cuts in electronics (-74.0% y/y) and automotive industries (139.2% y/y) rose m/m.

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

Challenger also reported a sharp m/m increase in announced hiring plans (81.7% y/y).

Challenger, Gray & Christmas April Mar Y/Y 2005 2004 2003
Announced Job Cuts 59,688 64,975 3.2% 1,072,054 1,039,935 1,236,426
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