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Economy in Brief

Challenger Layoffs Back Down
by Tom Moeller November 2, 2006

Announced job cuts reported by Challenger, Grey & Christmas for October retraced most of the prior month's jump with a 31,138 decline to 69,177. The three month moving average of layoff announcements nevertheless rose to 78,257, its highest level since March.

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 (210.3% y/y), commodities (77.2% aerospace (-70.7% y/y), consumer goods (-23.9% y/y), industrial goods (-32.6% y/y), and pharmaceutical (-74.1% y/y) industries.

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

Challenger also reported that announced hiring plans fell sharply m/m (-54.3% y/y).

Challenger, Gray & Christmas October September Y/Y 2005 2004 2003
Announced Job Cuts 69,177 100,315 -14.9% 1,072,054 1,039,935 1,236,426
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