Thursday, May 31, 2012

Disappointing May '12 Challenger Job Cuts Report

The May '12 Challenger job cuts report was disappointing. 

It came in at 61,887, up 52.6% from April's 40,559, and up 66.7% from May '11.  YTD job cuts of 245,540 are up 20.1%.  Top three reasons for job cuts were restructuring, closing and cost-cutting, which we think indicate not-so-great, or moderate, economic conditions at best.  Total planned job cuts in May were highest in the computer, transportation and financial industries; and highest in the Western region with CA leading the way.

On the hiring front, according to Challenger, there were 7,722 announced hiring plans in May, down 4,072 m/m, and down 2,526 Y/Y.  Hiring plans were highest in the automotive, health care/products, and industrial goods industries.

This report certainly isn't positive.  However, it does not necessarily indicate how good or bad tomorrow's official employment report will be.  A better indicator, although not accurate, is the ADP report which will be released at 8:15am.

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