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Economy in Brief

Challenger Layoffs Tick Higher But Hiring Plans Jump
by Tom Moeller   October 6, 2010

The outplacement firm of Challenger, Grey & Christmas indicated that the level of layoffs during September increased slightly to 37,151 but that was still near 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 nine months of 2010 totaled 411,272, down two-thirds from 1,136,908 announced during the first nine 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 rose in September in the aerospace & defense, chemical, financial, food, government, pharmaceutical and transportation industries. Layoffs fell in apparel, automotive, computer, consumer goods, entertainment/leisure, health care, industrial goods, insurance, media, retail, services and utilities. 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 they jumped last month by 123,076, up five times from the year-ago level. Plans jumped in the industrial goods and services industries.

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

Challenger, Gray & Christmas September August July Y/Y 2009 2008 2007
Announced Job Cuts 37,151 34,768 41,676 -44.1% 1,288,030 1,223,993 768,264
Announced Hiring Plans 123,076 14,075 8,151 391.4% 272,573 118,600 365
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