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Economy in Brief

Challenger Job Cut Announcements Rise Sharply
by Tom Moeller  September 5, 2013

The outplacement firm of Challenger, Gray & Christmas reported that 50,462 job cuts (56.5% y/y) were announced during August, the highest level in six months. Job cuts surged in the industrial goods, computer, electronics, energy, food, financial, media and telecommunication industries. These increases were offset by widespread declines in other industries including aerospace/defense, commodities, automotive, education, insurance, services and retail.

During the last ten years there has been a 67% 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.

Challenger also samples firms' hiring plans and they fell by roughly one-third versus last year. Lessened employment was planned in the consumer products, health care and electronics industries.

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

Challenger, Gray & Christmas Aug Jul Jun Y/Y% 2012 2011 2010
Announced Job Cuts 50,462 37,701 39,372 56.5 523,362 606,082 529,973
Announced Hiring Plans 7,662 9,728 8,774 -36.6 630,447 537,572 402,638
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