There were 60,357 corporate layoffs announced in America last month, according to a new report from Challenger, Gray & Christmas. That is a 71 percent jump from February, 39 percent higher compared to this same period last year, and the largest total for monthly job cuts since April 2016. As a result, 140,379 layoffs have been announced during the first quarter of 2018, 11 percent more than in Q1 2017 and 44 percent higher than the final three months of last year. The retail sector has been a major factor behind 2018’s elevated number of layoffs, as the industry continues to face competition from online merchants (Amazon). Moreover, there have already been 1,730 announced retail store closures this year following the 9,241 store closures that were announced in 2017.
John Challenger, Chief Executive Officer of Challenger, Gray & Christmas, added that “In 2016, cuts in retail and oil drove announcements in the first quarter. This year, we are likewise seeing cuts in retail, as that industry continues to pivot to meet consumer demand.” Mr. Challenger also cautioned that “The growth and job creation we’ve seen over the last few months may be coming to an end. As wages grow and the labor market tightens, companies are going to switch to a no-risk strategy and potentially begin contracting.” Somewhat related, first-time claims for unemployment benefits unexpectedly jumped last week to the highest reading since the start of the year. However, this increase follows the nearly half-decade low hit in the prior week, and initial jobless claims have held below 300K for a record 161 weeks in a row.
Sources: Econoday, U.S. DoL, Challenger, Gray & Christmas, FRBSLPost author: Charles Couch