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Economy in Brief

Challenger Layoffs Retreated
by Tom Moeller August 1, 2007

Challenger, Grey & Christmas reported that job cut announcements in July fell to the lowest level in a year, and that was the lowest level since 2000. The 23.1% m/m decline to 42,897 announcements followed a 21.6% decline during June.

Job cut announcements fell across most industries such as apparel (-32.0% y/y), chemical (-81.3% y/y), consumer goods (-43.9% y/y), industrial goods (-49.7% y/y), and services (-69.05 y/y. Increases in layoffs m/m occurred in the electronics, retail, and transportation industries.

During the last ten years there has been a 79% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.

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

Challenger also reported that announced hiring plans nearly doubled last month versus June and they were up sharply from a year ago.

Challenger, Gray & Christmas July June Y/Y 2006 2005 2004
Announced Job Cuts 42,897 55,726 12.0% 839,822 1,072,054 1,039,935
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