The Challenger report for layoff intentions in February jumped 45.0% to 76,835 in February from January and rose a whopping 117.2% from February 2018. However, conditions are far less dire than the headline would suggest.
The report noted that there was a one-time announcement that layoffs for military-related jobs of about 50,000. Excluding that, February’s total was a meager 26,835 and the lowest since 26,936 in November 2016. There was also a large one-time announcement at Payless Shoes that affected 16,000 workers. Consequently, the largest increases in February were in industrial goods (29,665) and retail (18,874). Many of these workers are likely to be snapped up by manufacturers hungry to find skilled workers to meet production demand and by retailers and wholesalers anxious to expand their workforces with experienced labor.
Reasons given for layoffs were largely concentrated in restructuring (32,827) as businesses try to be more efficient in the face of a limited pool of available workers and rising costs related to wages and inputs. Large numbers of layoffs were also due to bankruptcy (18,879) mainly on continued contraction in the retail sector.
Although hiring intentions were down 79.4% to 15,279 in February from January and off 89.1% from a year-ago, much of the decline reflected the absence of the sort of big announcement that was in January when Lowe’s said it planned to add about 60,000 workers. Unusually, many do-it-yourself stores have not yet announced their plans to hire this spring. There may have been some uncertainty about the timing of the arrival of tax returns due to the partial government shutdown combined with recent lower readings for consumer confidence. Expectations for the spring buying season for home and garden activity are more modest in 2019.
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