There were 36,081 corporate layoffs announced in America last month, according to a new report from Challenger, Gray & Christmas. That is a 40.2 percent decline from the 23-month high hit in March and 1.4 percent lower compared to this same period last year. However, employers have announced 176,460 job cuts 2018-to-date, 8.4 percent higher than during the first four months of 2017. The retail sector has been a major factor behind this year’s somewhat elevated number of layoffs, as the industry continues to face competition from online merchants (Amazon).
Moreover, there have already been 2,460 announced retail store closures this year following the 9,241 store closures that were announced in 2017. Other sectors, though, may not necessarily be sheltered from layoffs this year, as John Challenger, chief executive officer of Challenger, Gray & Christmas, cautioned that “An increase in large-scale job cut announcements could be on the horizon. … With rising wages, near full employment, and solid job creation, we may be in for a market correction over the upcoming months.” If true then it will be worth monitoring the weekly data on first-time claims for unemployment benefits, a leading economic indicator which is currently near a half-century low and therefore not flashing any immediate warning signs.
Sources: Econoday, U.S. DoL, Challenger, Gray & Christmas, FRBSLPost author: Charles Couch