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Economy in Brief

Challenger Layoffs Rose Slightly M/M But Remain Near Lowest in Ten Years
by Tom Moeller July 1, 2010

According to the outplacement firm of Challenger, Grey & Christmas the level of layoffs during June rose slightly to 39,358. Still, the level was off by roughly one-half from last year and slightly above the lowest level since 2000. Planned layoffs announced during the first six months of 2010 totaled 297,677, down two-thirds from the 896,675 announced during early-2009. In virtually all industries except computers, entertainment/leisure, pharmaceutical and retail layoffs were down last month versus June 2009.

Despite the decline in layoffs the unemployment rate from the Census Department remains high as the number of long-term unemployed has surged.

Challenger also samples firms' hiring plans and June plans fell for the second consecutive month. Versus June '09, however, plans fell 43.1% and during the first six months of this year they've fallen 15.8%. Plans eased during June in most sectors but strengthened in the energy, entertainment/leisure and food industries.

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 in 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 June May April Y/Y 2009 2008 2007
Announced Job Cuts 39,358 38,810 38,326 -47.1% 1,288,030 1,223,993 768,264
Announced Hiring Plans 11,721 14,922 15,654 -43.1% 272,573 118,600 365,583
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