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Economy in Brief

Mass Layoffs Higher Still
by Tom Moeller January 24, 2008

During December the number of mass layoff events rose another 7.8%, according to BLS data, and that countered a 1.3% November decline.These specific layoff incidents are called "mass layoffs" because they involve 50 or more initial claims for unemployment insurance.

The December gain left the number of mass layoff events, up 20% since December '06, at the highest level since January of 2005. For all of last year, mass layoff events rose 10.1% from 2006, reversing all of that year's 11.7% decline.

The December increase was accompanied by a 1.5% m/m gain in initial claims for unemployment insurance. Versus December of 2006 claims rose 8.2% versus the prior December. For the full year the number of claims rose 6.7%. That offset about half of the 2006 decline.

For all of last year the rise in mass layoff events was led by a 26.3% jump in the construction industry which offset all of 21.7% decline during 2006. Events in the factory sector rose 8.5% after an 11.5% '06 decline as layoffs in transportation industries rose 15.5%, 22.7% in furniture and 22.3% in primary metals.

Mass layoff events amongst industries in the service sector were scattered with a 64.5% rise in finance & insurance, a 5.8% gain retail trade and a 19.3% advance in the professional scientific & technical businesses. In the government sector mass layoff events rose but only by 2.5%. That offset just a piece of an 18.5% decline during 2006. In the arts & entertainment industries events fell 2.0% which followed a 16.4% decline during the prior year.

These mass layoff data are contained in Haver's flagship database, USECON. Data are also available by Census regions, divisions and states, including some industry detail for each. These are all carried in the REGIONAL database.

How Useful is Okun's Law? which examines the relationship between GDP growth and unemployment, from the Federal Reserve Bank of Kansas City, can be found here.

Mass Layoffs, SA December November December ‘06 Monthly Averages
2007 2006 2005
Number of Events 1,433 1,329 1,1940 1,269 1,152 1,305
Initial Claims
  (Number Persons)
127,897 118,414 123,558 129,808 121,609 143,402
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