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Economy in Brief

Challenger Layoffs Rose
by Tom Moeller July 6, 2006

Challenger, Grey & Christmas indicated that announced job cuts rose 25.1% last month (67,176) to the highest level since February.

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.

Increases m/m were pronounced in the automotive (-73.2% y/y), health care (+23.2% y/y), retail (-80.8% y/y), pharmaceutical (-27.5% y/y) and industrial goods (+45.9% y/y) industries.

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

Challenger also reported a moderate m/m increase in announced hiring plans (-34.6% y/y).

Challenger, Gray & Christmas June May Y/Y 2005 2004 2003
Announced Job Cuts 67,176 53,716 -39.5% 1,072,054 1,039,935 1,236,426
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