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Economy in Brief

by Tom Moeller Challenger Layoffs Down July 11, 2007

Announced job cuts reported by Challenger, Grey & Christmas in June fell 21.6% m/m from May to 55,726 and reversed much of the increases during the prior two months.

The three month moving average of layoff announcements remained about where it has been since December at 65,838.

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 (-79.3% y/y) and in the computer (-69.3% y/y) and health care (-70.0% y/y) industries.

Increases in layoff announcements were widespread, however, and sharp in the apparel (6,280.2% y/y), consumer goods (40.3% y/y) and financial (34.4% 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 15.0% m/m (-21.1% y/y).

Challenger, Gray & Christmas June May Y/Y 2006 2005 2004
Announced Job Cuts 55,726 71,115 -17.0% 839,822 1,072,054 1,039,935
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