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Economy in Brief

Challenger Layoffs Continue To Indicate Job Market Improvement
by Tom Moeller June 3, 2009

The outplacement firm of Challenger, Grey & Christmas indicated that job cut announcements eased for the fourth consecutive month. The announcement of 111,182 layoffs followed 132,590 during April. This cycle's largest layoff total occurred in January when there were 241,749 cuts. Challenger also reported, however, that announced hiring plans fell sharply after their jump during April.

Announcement of job cuts in the pharmaceutical industry fell even further after the sharp April decline to 698. Announcements in the retail industry also fell for the fourth consecutive month while job cuts in the real estate industry evaporated. Cuts in the retail industry fell as did cuts in the insurance and in the industrial goods sectors.

Picking up some steam were job cut announcements in the computer and in the construction sectors. The health care sector job cut announcements rose sharply.

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 May April Y/Y 2008 2007 2006
Announced Job Cuts 111,182 132,590 7.4% 1,223,993 768,264 839,822
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