U.S. Mass Layoffs Recover M/M And Are Up By Nearly One-Half From Last Year

The U.S. Labor Department reports figures covering mass layoffs which involve at least 50 initial claimants from a single establishment filing during a consecutive 5-week period. They include short-term layoffs of 30 days or fewer. During August, these layoffs recouped most of their July decline and were up by nearly one-half from the year earlier level. The series is most relevant because during the last ten years there has been a (negative) 82% correlation between layoffs and the m/m change in payroll employment.

Layoffs in private industries were quite significant last month and totaled 2,428, up 39.9% from last August. The jump from July very much reflected 900 layoff events (SA) in the factory sector. Though they were up significantly from last year they have fallen sharply from their 2009 peak. Layoffs in the machinery, transportation equipment, computer & electronics, electrical equipment, furniture industries were notable.

Mass layoffs in the construction industry followed next and there were 160 of them. While down slightly from July, they remained up by 12.7% from last August after increases of roughly one-quarter during the prior two years. In the service sector mass layoffs have become fewer in number, as reflected in the monthly reports on nonfarm payrolls. Layoffs have fallen y/y in the retail trade, information, real estate, professional & technical and the arts & entertainment industries.

Meanwhile, layoffs by in the government sector have risen by one-third y/y led by a three-quarters increase in the Federal sector and an increase of nearly one-half by state governments. Local governments have increased layoffs by a lesser 18% y/y.

The Mass layoff data are available in Haver's SURVEYS database.

Federal Reserve Transparency is today's House testimony Scott G. Alvarez, General Counsel, and it is available here.