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Economy in Brief

Challenger Layoffs Highest Since 2005
by Tom Moeller June 4, 2008

During May, job cut announcements continued to rise according to the Challenger, Grey & Christmas survey. A 15% increase from April to 103,522 pulled the level to its highest since December 2005. Since December announcements have more than doubled and the three-month average of announcements were at the highest level since 2006.

A rise in the three-month average of job cut announcements in services, financial and automotive sectors led the recent rise.

During the last ten years there has been a 76% (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 fell by more than one-third and reversed an April gain.

Challenger, Gray & Christmas May April Y/Y 2007 2006 2005
Announced Job Cuts 103,522 90,015 45.6% 768,264 839,822 1,072,054
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