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Economy in Brief

Challenger Layoffs Near Lowest in Ten Years
by Tom Moeller June 2, 2010

According to the outplacement firm of Challenger, Grey & Christmas the level of layoffs rose slightly m/m during May to 38,810. Nevertheless, the figure was off by roughly two-thirds from last year and just slightly above the lowest level since 2000. Planned layoffs announced during the first five months of 2010 totaled 258,319, down 68.6% from the 822,282 announced during early-2009. In virtually all industries except entertainment/leisure and pharmaceutical layoffs were down last month versus May 2009.

Challenger also samples firms' hiring plans. During May plans fell slightly after a strong gain during April. Versus May '09 plans rose 83.7% but during the first five months of this year they've fallen slightly y/y. Plans eased during May in the transportation, health care & financial sectors but strengthened in the auto, energy, industrial goods & services 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 May April March Y/Y 2009 2008 2007
Announced Job Cuts 38,810 38,326 67,611 -65.1% 1,288,030 1,223,993 768,264
Announced Hiring Plans 14,922 15,654 13,994 83.7% 272,573 118,600 365,583
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