Global| Nov 07 2005Challenger Layoffs Up Again in October, Trend Lower
by:Tom Moeller
|in:Economy in Brief
Summary
Last week, Challenger, Grey & Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at [...]
Last week, Challenger, Grey & Christmas reported that job cut announcements in October rose for the second consecutive month. The 13.2% m/m rise to 81,301 nevertheless left the three month average of job cut announcements down 8.8% at 74,569 (-21.2% y/y), the lowest level since August of last year.
During the last ten years there has been an 84% (inverse) correlation between the three month moving average of announced job cuts and the three month change payroll employment.
Job cut announcements differ from layoffs. Many are achieved through attrition, early retirement or just never occur.
Increases in job cut announcements m/m were reported in apparel (65.5% y/y), automotive (11.5% y/y), insurance (272.2% y/y) and telecommunications (-28.5% y/y) pharmaceutical (37.0% y/y) industries although declines were noted in consumer goods (-45.0% y/y), electronics (-48.3% y/y), financial (-78.2% y/y) and retail (+118.0% y/y).
Challenger also reported that announced hiring plans also rose to a level up sharply from last October.
The Yield Curve as a Leading Indicator: Frequently Asked Questions answered by the Federal Reserve Bank of New York is available here.
Last week's comments from Federal Reserve Board Vice Chairman Roger W. Ferguson, Jr. at the Cato Institute titled Monetary Credibility, Inflation, and Economic Growth can be found here.
| Challenger, Gray & Christmas | Oct | Sept | Y/Y | 2004 | 2003 | 2002 |
|---|---|---|---|---|---|---|
| Announced Job Cuts | 81,301 | 71,836 | -20.2% | 1,039,175 | 1,236,426 | 1,431,052 |
Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.
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