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Economy in Brief

Challenger Indicates Further Improvement in the Labor Market
by Tom Moeller January 6, 2010

Labor market improvement is counted as fewer jobs lost and more jobs gained. Both were indicated for December by the outplacement firm of Challenger, Grey & Christmas Their measure of job cut announcements fell last month to 45,094, compared to a high of 241,748 in January of last year. The latest reading was the least number of layoffs since December 2007. Layoffs moderated in the construction, consumer goods, financial, health care, retail, services and transportation industries. They rose in the apparel and in the industrial goods industries.

Challenger also samples firms' hiring plans. During December plans recouped the November decline and were more than triple the year-ago level. Plans picked up sharply in the financial and aerospace/defense industries but more moderately in the government and insurance industries. The net of hires less layoffs was near its least 2007.

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.

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

Challenger, Gray & Christmas December November October Y/Y 2009 2008 2007
Announced Job Cuts 45,094 50,349 55,679 -72.9% 1,288,030 1,223,993 768,264
Announced Hiring Plans 35,592 10,076 57,520 253.0 272,573 118,600 365,583
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