Layoffs at 11 Month High

Challenger, Gray & Christmas released their February 2011 layoff report which shows layoffs surged 32% in February to 50,702.

The 50,702 job cuts announced last month was up 32 percent from January’s 38,519. It was 20 percent higher than the 42,090 planned layoffs announced in February 2010. This marks the first year-over-year increase in monthly job cuts since May 2009 when job cuts totaling 111,182 surpassed the 103,522 layoffs announced the same month a year earlier by seven percent.

While Challenger, Gray & Christmas seem to be blaming high gas prices, the details in the layoffs paint a different picture:

The largest portion of layoffs last month came from government and non-profit employers, which announced 16,380 job cuts, up 154 percent from 6,450 in January and 196 percent higher than a year ago when 5,528 job cuts were announced in February. While most of the cuts occurred at the state and local level, the United States Postal Service announced that it reduced its headcount by 5,600 in recent months.

This is your government at work, with a 154% increase in government and non-profit layoffs. Government layoffs are directly attributable to the never ending state budget deficit malaise and the claims one must stiff Federal Workers in order to reduce them (which is false).

Retail sector layoffs increased 44% and we've seen a slowdown in consumer spending, with more money going to gas and food.

Challenger also releases the reasons for the layoffs. Cost cutting was the highest with 15,225 jobs lost, more interesting are the closings and bankruptcies of businesses. Those job losses for February totaled 15,996. Going out of business topped the reason people lost their jobs.

Hey, can't be all bad, Home Depot is going to hire 60,000 lowly paid, part-time temporary workers. Yippee, assuredly one can raise a family on that paycheck.

This is in stark contrast, what a surprise, to the ADP employment report claiming February had an increase of 217,000 jobs. Last month, being thoroughly disgusted with the divergence between ADP and BLS, we decided to not cover ADP due to the BLS being the official unemployment tally.

The BLS released their layoff statistics for January last week. In January the BLS claims 149,799 people lost their jobs in mass layoffs. This is in comparison to the Challenger, Gray & Christmas reported 38,519 January layoffs.

The Challenger survey also has it's own problems with methodology. While not listed in the report, back in 2001 the Wall Street Journal reported Challenger used public corporate announcement press releases for their layoff tallies. We all know Corporations do not want it known they offshore outsourced jobs and very often announced layoffs are much lower than the actual number of firings.

The real answer is to demand businesses in the United States more accurately report hirings, firings, offshore outsourcings and jobs created offshore. Maybe then we would not be playing guess what the statistic indicates games monthly.

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But Initial Claims Have Dropped Considerably

Once again I'll remark that this is all so confusing to me.

Over the past few weeks NSA (nonseasonally adjusted) initial claims have dropped a lot.

These contradictory reports make my head spin.

Feb 26 Feb 19 Change Feb 12
368,000 388,000 -20,000 413,000 (SA)
351,076 381,105 -30,029 424,400 (NSA)

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head spin

I couldn't agree more with the head spin. BLS indicates mass layoffs were up, Conference Board shows fewer job openings in February and ADP shows huge job gains. There's no consistency except that the market always goes higher regardless of report.

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