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Economy in Brief

Challenger Layoffs Diminish And Hiring Plans Improve
by Tom Moeller September 1, 2010

According to the outplacement firm of Challenger, Grey & Christmas the level of layoffs during August fell to 34,768, the smallest number since June of 2000. The level remains down by more than one-half from last year. Planned layoffs announced during the first eight months of 2010 totaled 374,121, down two-thirds from the 1,070,504 announced during the first eight months of 2009. Despite the decline in layoffs, the unemployment rate from the Census Department remains high as the number of long-term unemployed has surged.

Layoffs fell in August in the financial, construction, computer, electronics, health care, government and pharmaceutical industries but rose in apparel, industrial goods, energy, services and automotive. 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 August plans reversed the declines of the prior two months. Versus August '09 plans rose 7.4%. Plans picked during August in the entertainment/leisure, auto, health care and services industries but fell sharply in computers, media and transportation.

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

Challenger, Gray & Christmas August July June Y/Y 2009 2008 2007
Announced Job Cuts 34,768 41,676 39,358 -54.5% 1,288,030 1,223,993 768,264
Announced Hiring Plans 14,075 8,151 11,732 7.4% 272,573 118,600 365,583
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