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Economy in Brief

Challenger Layoffs Move To Lowest Since Late-2007
by Tom Moeller December 1, 2009

The outplacement firm of Challenger, Grey & Christmas indicated that job cut announcements fell last month to 50,349, compared to a high of 241,748 in January of this year. The latest reading was the least number of layoffs since December 2007. Layoffs have moderated sharply in the apparel, consumer goods, financial, retail, services and transportation industries. They rose sharply in the health care industry and moderately in the insurance industry.

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.

These figures are gross layoffs and do not reflect new hires as do the monthly figures on payroll employment. At their 2007 low, the latest Challenger figures were then accompanied by monthly gains in nonfarm payrolls of roughly 160,000.

Challenger also provides data on firms' hiring plans. During November plans fell back to the recession lows after having increased over the last two months. The net of hires less layoffs nevertheless was near its least 2007.

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

The Recession in Perspective from the Federal Reserve Bank of Minneapolis can be found here.

Challenger, Gray & Christmas November October September Y/Y 2008 2007 2006
Announced Job Cuts 50,349 55,679 66,404 -72.3% 1,223,993 768,264 839,822
Announced Hiring Plans 10,076 57,520 25,047 -9.7 118,600 365,583 273,887
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