US Layoffs Up Nearly 200% in 2023

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Facts

  • According to a report released Thursday by the career services firm Challenger, Gray & Christmas, US companies laid off more than 47K employees last month, up 58% year-over-year. Over the first nine months of the year, the report said there were roughly 605K layoffs, a 198% jump from last year.1
  • While the worst industry in this respect was the tech sector, which has had 152K layoffs so far this year, up 716% year-over-year, the retail and health sectors were second and third, laying off 71K and 53K, respectively. On a percentage basis, the media industry was right behind tech, showing a 550% increase in layoffs.1
  • Earlier this week, the Labor Department reported an unexpected surge in job openings, with ADP announcing that private payrolls grew below forecasts at 89K. Friday's upcoming nonfarm payroll report is expected to show jobs increased by 170K in September, down 17K from August.2
  • This comes as job openings have dropped since the 12M posted in April 2022, and though openings did jump in August, the number of openings per unemployed worker was stagnant at roughly 1.5. Meanwhile, the rate of workers quitting their jobs in August remained at 2.3%.3
  • Meanwhile, those seeking unemployment benefits totaled a seasonally adjusted 207K in the week ending Sept. 30, up 2K from the prior period but lower than the 210K projected by the Dow Jones consensus.2
  • As the Federal Reserve has boosted interest rates over the last 19 months to try and cool inflation, the labor market has remained mostly resilient. The unemployment rate, too, has remained in line with pre-pandemic levels, hovering between 3.4% and 3.8% this year.1

Sources: 1Forbes, 2CNBC and 3New York Times.

Narratives

  • Pro-establishment narrative, as provided by Abc news. Despite fears that the Fed's rate hikes — which were necessary in the face of record inflation —  would lead to reduced spending, job cuts, and high unemployment, the actual outcome has been more positive. Inflation has decreased from 9.1% to 3.7%, and unemployment remains below 4%. Furthermore, inflation was driven more by supply disruptions from the pandemic and geopolitical events rather than overheated demand. If current trends persist, the Fed might actually achieve a soft landing.
  • Establishment-critical narrative, as provided by Wall street journal. It's not the Fed but rather the bond market, particularly the 10-year Treasury yield, that has the biggest impact on rising interest rates in everyday life. As the Fed and China have bought up most of the US's $33T debt, Americans should be concerned about when the creditors demand higher interest rates. The US Treasury yield is the most important asset in the world, but Washington continues to spend recklessly while bickering about the less consequential Fed rate.

Predictions