On Thursday, November 3, Challenger, Gray & Christmas, Inc., a global outplacement consultancy firm, reported that jobs cut in the month of October amounted to 30,740 in the U.S. economy.
Month-over-month, job cuts in the U.S. economy witnessed a steep decline. In September, job cuts were 44,324. Job cuts in October were the lowest since May of this year.
Why is this data important? Investors and economists use these figures as a leading indicator to assess the health of the U.S. labor market. Elevated job-cut levels suggest that the labor market could face trouble ahead. Lower job cuts suggest conditions might be improving.
Year-to-date, between January and October, employers have announced 466,352 job cuts. In the same period a year ago, there were 543,935 job cuts announced by employers in the U.S. economy. This represents a decline of 14.26% year-over-year. (Source: “2016 October Job Cut Report: Cuts Fall 31% to 30, 740,” Challenger, Gray & Christmas, Inc., November 3, 2016.)
The U.S. economy’s energy industry remains the most active when it comes to job cuts. Year-to-date, there were 103,146 job cuts in the energy industry—14.54% higher than the same period a year ago.
With this said, Texas remains the state that’s witnessing the biggest layoffs. Year-to-date, there have been 102,442 layoffs in Texas.
Also, the computer industry is showing consistent job cuts over the past several months. Year-to-day, the industry has cut 64,511 jobs. This is 8.2% higher than the same period a year ago. Regarding this, the CEO of Challenger, Gray & Christmas, Inc., John A. Challenger said, “Heavier job cuts in the tech sector this year have been more indicative of an industry that is in flux, as opposed to one that is in trouble. That is the nature of technology, so it is not unusual to see workforce volatility. Overall, the tech sector is about as healthy as it gets.” (Source: Ibid.)
One of the biggest reasons stated by employers for job cuts in October was restructuring; 17,040 jobs were cut due to this factor alone. Year-to-date, 170,891 jobs have been cut due to restructuring, making up 36.64% of all job cuts in the U.S. economy year-to-date.
Commenting on the upcoming presidential elections and layoff and job creation data, the CEO of the firm added, “When you look at the layoff data, alongside job creation statistics, it is hard to imagine that the election will come down to the economy. However, this has been one of the most unusual elections in history, so it is impossible to say what the deciding factor will be when people step into the voting booth on Tuesday.” (Source: Ibid.)
This data is usually released three days after the month ends. The next release date is Thursday, December 1, 2016.