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Economy in Brief

Challenger Layoffs Also Show Job Market Improvement
by Tom Moeller May 6, 2009

For April, the outplacement firm of Challenger, Grey & Christmas indicated that cut announcements eased for the third month. The announcement of 132,590 layoffs followed 150,411 during March and both of the figures were down from the cycle high of 241,749 reached in January. Challenger also reported that announced hiring plans rose to the highest level since early-2007.

Announcement of job cuts in the pharmaceutical industry dropped sharply to 1,671 after their record March surge. Announcements in the electronics industry also halved their March jump and in the retail industry job cuts showed the third month of moderation and the number of jobs fell to a modest 2,927. Finally, the computer industry shed just 1,702 jobs which was the least since August of last year and cuts in the financial business fell to 6,645.

Picking up some steam were job cut announcements in the automotive sector which rose to 24,172 after easing during March. Also there was a pickup in layoffs in the industrial goods sector where there were 18,636 announcements. Employment cutbacks in the insurance industry also rose as there were 1,330 which was up sharply from the prior two months.

During the last ten years there has been a 67% (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.

The Challenger figures are available in Haver's SURVEYS database.

Challenger, Gray & Christmas April March Y/Y 2008 2007 2006
Announced Job Cuts 132,590 150,411 47.3% 1,223,993 768,264 839,822
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