New data show that employers handed out fewer pink slips in September than in August, when the number was at its five-month high, but layoffs were up significantly compared to a year ago.
According to recruitment firm Challenger, Gray, and Christmas, U.S.-based employers announced nearly 73,000 job cuts in September. While this was down by 4 percent from the previous month’s 75,891, the layoffs were up by 53 percent from last year.
In the first nine months of 2024, personnel reductions rose by 0.8 percent year over year, to 609,242, surpassing the prior year’s running tally for the first time this year. This is the highest level since 2020, when more than 2 million layoffs were announced between January and September.
A sizable portion of the year-to-date layoffs were centered in technology (116,858), entertainment and leisure (31,054), education (25,285), transportation (25,263), and manufacturing (19,794). These numbers have risen substantially from the same span in 2023.
The Challenger report highlighted cost-cutting, business closures, and artificial intelligence as the top reasons for job cuts.
“We’re at an inflection point now, where the labor market could stall or tighten,” said Andrew Challenger, the firm’s senior vice president. “Layoff announcements have risen over last year, and job openings are flat.”
So far this year, employers have announced plans to hire close to 484,000 positions, down by 33 percent from 2023. Researchers say this is the lowest year-to-date hiring since 2011.
Labor market conditions could be stimulated in the coming months as the Federal Reserve slashes interest rates, and consumer spending is expected to rise, Challenger says.
That said, layoffs continue to hit the headlines.
This past summer, various businesses laid off a considerable number of workers. Intel, for example, terminated 15,000 employees. Cisco let go of 56,000 personnel. Intuit trimmed payrolls by 1,800, and IBM fired 1,000 staff members.
Snapshot of US Jobs Arena
The U.S. labor market has stalled, with employers neither hiring nor firing at immense scales, says Bill Adams, the chief economist for Comerica Bank.
According to the August Bureau of Labor Statistics Job Openings and Labor Turnover Summary (JOLTS), the number of hires was little changed at 5.3 million, and the number of separations (discharges, layoffs, and quits) was flat.
Still, the JOLTS report showed an unexpected jump in job vacancies, topping 8 million for the first time since May.
“This noisy indicator is starting to suggest a stabilization of the job market as the Fed pivots,” Adams stated in a note, as viewed via email by The Epoch Times. “Relatively few workers are being fired or laid off, and few are leaving jobs voluntarily for other opportunities, either.”
While the September jobs report will be the week’s main event, market watchers are bracing for October employment data due to the economic fallout from Hurricane Helene and the port strike.
Adams noted that the economy faces many near-term headwinds that will affect next month’s figures.
“The impact of Helene and the strike also will likely affect October’s retail sales, industrial production, and jobless claims data, making the economy’s trend harder to tease out in the late fall months,” he added.
The U.S. economy is projected to have created 140,000 new jobs in September. The unemployment rate is expected to hold steady at 4.2 percent.
Holiday Season
Employers are ostensibly optimistic about the holiday shopping season, Challenger notes.
Scores of retailers have been ramping up their seasonal hiring plans.
Amazon, for example, announced on Oct. 3 that it will hire 250,000 workers for the year’s busiest shopping period. Last month, Target said it plans to hire about 100,000 seasonal employees. Macy’s says it will fill more than 31,500 full- and part-time seasonal positions. UPS aims to hire 125,000 seasonal workers ahead of Christmas.
Companies are bracing for solid consumer demand. Sales for the 2024 Christmas shopping season are projected to increase by as much as 3.3 percent from 2023, according to Deloitte. Between November and January, holiday sales will total $1.58 trillion to $1.59 trillion.
Adobe forecasts that e-commerce sales will hit a new record of just below $241 billion. The so-called Cyber Week (i.e., Thanksgiving, Black Friday, and Cyber Monday) is predicted to account for one-fifth of online holiday sales.
But, according to Adams, do not expect these jobs to be filled by many of those terminated by their companies this year.
“Many of those who found themselves laid off this year from high-wage, high-skill roles, will not likely fill seasonal positions,” he said.
Last year, the National Retail Federation, citing U.S. Census Bureau data, reported that core retail sales during the holiday season advanced by 3.8 percent over 2022, to an all-time high of $964.4 billion.
From The Epoch Times