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Economy in Brief

Challenger Layoffs Rise And Hiring Plans Fall, Both For The Third Month
by Tom Moeller August 04, 2010

According to the outplacement firm of Challenger, Grey & Christmas the level of layoffs during July rose slightly to 41,676, the third increase in as many months. Despite the latest upward drift in layoffs, the level remains down by more than one-half from last year and just slightly above the lowest level since 2000. Planned layoffs announced during the first seven months of 2010 totaled 339,353, down two-thirds from the 994,048 announced during the first seven months of 2009. Despite the recent decline in layoffs, the unemployment rate from the Census Department remains high as the number of long-term unemployed has surged.

Layoffs rose in July in the consumer goods, electronics, financial, food, health care, insurance, and transportation 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.

Challenger also samples firms' hiring plans and July plans fell to the lowest level since May, 2009. Versus July '09 plans fell 52.6%. Plans picked during July in the auto, computer, industrial goods and transportation industries but fell sharply in construction, consumer goods and foods.

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

Challenger, Gray & Christmas July June May Y/Y 2009 2008 2007
Announced Job Cuts 41,676 39,358 38,810 -57.2% 1,288,030 1,223,993 768,264
Announced Hiring Plans 8,151 11,732 14,922 -52.6% 272,573 118,600 365,583
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