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Economy in Brief

Challenger Layoffs Up a Bit
by Tom Moeller February 12, 2007

Announced job cuts reported by Challenger, Grey & Christmas in January rose 15.2% to 62,975 and reversed about half of the prior month's decline. The three month moving average of layoff announcements nevertheless declined to 64,797, its lowest level since August.

During the last ten years there has been an 83% (inverse) correlation between the three month moving average level of announced job cuts and the three month change payroll employment.

Layoffs fell sharply m/m in the automotive (-92.6% y/y) and chemical (-87.0% y/y) and financial (+20.4% y/y) industries.

Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.

Challenger also reported that announced hiring plans rose 17.9% m/m (-43.4% y/y).

Challenger, Gray & Christmas January December Y/Y 2006 2005 2004
Announced Job Cuts 62,975 54,643 -39.1% 839,822 1,072,054 1,039,935
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