Should we be alarmed that the number of job cuts announced by large U.S. companies was 35 percent higher in April than it was in March? This is definitely a case where the trend is not our friend. According to Challenger, Gray & Christmas, U.S. firms announced 65,141 job cuts during April, which represented a massive 35 percent increase over the previous month. And so far this year overall, job cut announcements are running 24 percent higher than for the exact same period in 2015. Meanwhile, on Thursday we learned that initial claims for unemployment benefits shot up dramatically last week. In fact, the jump of 17,000 was the largest increase that we have seen in over a year. Of course the U.S. economy has been slowing down for quite a while now, and many have been wondering when we would begin to see that slowdown reflected in the employment numbers. Well, that day has now arrived.
At this point, U.S. firms are laying off people at a rate that we have not seen since the last financial crisis. Here is what Zero Hedge had to say about these latest numbers…
While one can debate the veracity of the BLS’ seasonally adjusted data, one thing is certain: when a company announces it will layoff thousands, it will. So for all those who suggest that all is well with the US jobs picture based on initial claims reports, here is the latest report from Challenger according to which the pace of downsizing increased in April jumped by 35% to 65,141 during the month of April, from the 48,207 layoff announcements in March.
Looking further back, in the first four months of 2016, employers have announced a total of 250,061 planned job cuts, up 24% from the 201,796 job cuts tracked during the same period a year ago.