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Economy in Brief

U.S. Challenger Layoffs Highest Since 2004
by Tom Moeller November 5, 2008

According to the Challenger, Grey & Christmas survey, layoffs jumped last to their highest level since January of 2004. The rise to 112,884 was a near-doubling from last October and the three-month level layoffs at 98,905 was its highest since early 2006.

The rise in layoffs last month was led by 17,949 cuts in financial industries and 15,692 cuts in the automotive industry. There also were 6,946 layoffs in the consumer goods sector, 6,301 in the electronics industries and 5,930 layoffs in the telecommunication businesses

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 3.2% y/y.

The causes and consequences of economic restructuring: evidence from the early 21st century from the Federal Reserve Board can be found here.

Challenger, Gray & Christmas October September Y/Y 2007 2006 2005
Announced Job Cuts 112,884 95,094 78.9% 768,264 839,822 1,072,054
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