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Economy in Brief

U.S. Challenger Layoffs Lowest In Ten Years
by Tom Moeller  January 06, 2011

The outplacement firm of Challenger, Grey & Christmas reported that the level of layoffs during December fell sharply to 32,004. The level was the lowest since June 2000. For the full year, planned layoffs totaled 529,973, down 58.9% from 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 the aerospace (-17.0% y/y), chemical (-65.1% y/y), consumer goods (+41.9% y/y), entertainment/leisure (+806.2% y/y), government (-41.7% y/y), insurance (-19.9% y/y), pharmaceutical, services (+24.5% y/y) and telecommunication (-100.0% y/y) industries. Layoffs rose elsewhere. 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 which again fell sharply last month to just 10,575. Plans fell hardest in entertainment/leisure (-50.0% y/y), financial (-100.0% y/y), health care, industrial goods (33.3% y/y), retail (1,900% y/y) and services.

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

Challenger, Gray & Christmas Dec Nov Oct Y/Y 2010 2009 2008
Announced Job Cuts 32,004 48,711 37,986 -29.0% 529,973 1,288,030 1,223,993
Announced Hiring Plans 10,575 26,012 124,766 -70.3% 402,638 272,573 118,600
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