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Economy in Brief

Challenger Layoffs Lowest Since 2000
by Tom Moeller August 1, 2006

Challenger, Grey & Christmas reported that announced job cuts in July more than reversed the prior month's gain and dropped 44.7% to 37,178, the lowest level since June of 2000.

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 fell sharply m/m in the automotive (-57.2% y/y), computer (-85.5% y/y), financial (-85.1% y/y), health care (65.8% y/y), industrial goods (-35.8% y/y) and pharmaceutical (-86.0% y/y) industries.

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

A m/m increase in the level of layoffs was reported in the electronics (-91.5% y/y), chemical (-66.1% y/y) and the entertainment & leisure (+24.4% y/y) industries.

Challenger also reported that announced hiring plans more than doubled m/m (27.1% y/y).

Challenger, Gray & Christmas July June Y/Y 2005 2004 2003
Announced Job Cuts 37,178 67,176 -63.9% 1,072,054 1,039,935 1,236,426
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