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Economy in Brief

Challenger Indicates Labor Market Deterioration
by Tom Moeller February 3, 2010

Earlier labor market improvement paused last month as announced job cuts rose and hiring plans fell, according to the outplacement firm of Challenger, Grey & Christmas. Their measure of job cut announcements increased last month to 71,482 but that still was well below the high of 241,748 in January of last year. Layoffs increased sharply in the pharmaceutical, retail and telecommunications industries.

Challenger also samples firms' hiring plans. During January, plans fell slightly m/m but were up nearly one-third from the year-ago level. Plans picked up sharply in the electronics and entertainment/leisure industries. The net of hires less layoffs fell slightly m/m but remained near its ebb in 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 January December November Y/Y 2009 2008 2007
Announced Job Cuts 71,482 45,094 50,349 -70.4% 1,288,030 1,223,993 768,264
Announced Hiring Plans 31,381 35,592 10,076 30.9 272,573 118,600 365,583
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