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Economy in Brief

Challenger Job Cut Announcements Edge Higher
by Tom Moeller  November 6, 2013

The outplacement firm of Challenger, Gray & Christmas reported that 45,730 job cuts (-4.2% y/y) were announced during October. The moderate increase from 40,289 in September reflected more layoffs in the pharmaceutical, media, telecommunications, apparel, automotive, electronics, education, financial, food, government and  legal industries. These were offset by declines in the consumer products, energy, retail, aerospace/defense, commodities, computer, health care, industrial goods, insurance, services and utility industries. 

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 due to the sharp pullback in hiring in the retail industry. Smaller declines were posted in the health care, automotive, consumer products, education, and utility industries. These were offset by increased hiring in the transportation, entertainment/leisure, computer, electronics, energy, food, pharmaceutical and services industries.  

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

The Federal Reserve's Framework for Monetary Policy--Recent Changes and New Operations from The Federal Reserve Board is available here. 

Challenger, Gray & Christmas Oct Sep Aug Y/Y% 2012 2011 2010
Announced Job Cuts 45,730 40,289 50,462 -4.2 523,362 606,082 529,973
Announced Hiring Plans 87,874 444,617 7,662 17.1 630,447 537,572 402,638
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