The Challenger report on layoff intentions in September was down 22.3% to 41,557 from 53,480 in August, and down 24.8% from the 55,285 in September 2018. However, the total for 2019 to-date reached 464,869, significantly higher than the 366,058 for the same period in 2018. If layoff intentions were down in September, it is probably more of a pause as businesses stop to assess economic conditions and prepare for year-end. That pause may linger into October, but at this time I would look for a burst of layoffs in November and December unless the present slowdown manufacturing sees an unexpected rebound.
Certainly some of the number of layoffs in 2019 are attributable to the ongoing collapse in retail for underperforming brick-and-mortar locations (65,358 in 2019 to-date compared to 85,385 in 2018 to-date). However, layoffs in industrial goods have accelerated sharply (60,943 from 20,699) as have layoffs in technology (40,257 from 9,485) and energy (22,767 from 6,567). This points to a broader softening in overall conditions, not just weakness in one or two sectors as they restructure.
In September, the largest numbers of layoffs were in retail (8,132, or 19.6% of the total), industrial (5,067, or 12.2%), and automotive (4,912, or 11.8%). Some of the industrial and automotive layoffs were related to the UAW strike at GM. If the strike lingers, it will result in even more cuts in October. The longer the strike goes on, the fewer jobs that may return once it is concluded as businesses will have to adjust to lost orders and income.
Among reasons given for layoffs the lead was in closing (11,027, or 26.5% of the total), followed by bankruptcy (7,665, or 118.4%) and no reason (7,257, or 17.5%). These are jobs lost that are not going to come back and the labor market may be less able to absorb the displaced workers.
Hiring plans in September jumped 1,743.4% to 459,689, reflecting the normal September announcements for hiring holiday workers. There were 299,200 workers in retail (65.1% of the total) and 150,263 in transportation (32.7%). Excluding these two categories, hiring intentions were 10,266 for the month with the strongest gains in Fintech (1,000), followed by entertainment/leisure (900) and food (600).
Disclaimer: Whetstone Analysis provides commentary as a service to its subscribers. Whetstone Analysis is not responsible for, and expressly disclaims all liability for, damages of any kind arising out of use, reference to, or reliance on any information contained within the site. While the information contained within the site is periodically updated and every effort is made to ensure its accuracy, no guarantee is given that the information provided in this Web site is correct, complete, and up-to-date. Click here to read our full Disclaimer.