Econoday Report: Challenger Job-Cut Report 6, 2005

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Challenger Job-Cut Report

Definition
A monthly report on the number of announced corporate layoffs. It is not adjusted for seasonal variations. The report indicates trends in the labor market. Why Investors Care

Released on 7/6/05 For Jun 2005

Announced Layoffs, Level
Actual	110,996

Highlights
Challenger's count of U.S. layoff intentions rose sharply in June, to 110,996 vs. 82,283 in May. A year ago, layoff intentions were nearly half the current total, at 64,343.

The report said layoffs were centered in the auto sector (45,378) and retail sector (24,065). The latest news is another signal that trouble is brewing in the nation's auto sector and associated industries.

Hiring intentions totaled 24,313 vs. 21,827 in May.

The Challenger report has been an accurate gauge in recent months of the monthly employment report, showing strong job conditions in April and weak conditions in May. Reaction in the financial markets to the report was uncertain as it was released with a strong ISM non-manufacturing report that included a strong gain in its employment index. Will Challenger's soft results have more bearing on expectations for Friday's key jobs report? Or will the ISM's employment index?

Trends

The Challenger Job-Cut Report could serve as a leading indicator for new jobless claims. However, not all layoff announcements result in near term job losses. For instance, companies often announce layoffs that will result in job losses but not immediately. Companies would simply not replace workers who quit voluntarily.

Data Source: Haver Analytics

2005 Release Schedule

Released On: 1/5 2/2 3/2 4/5 5/3 6/2 7/6 8/3 9/2 10/5 11/2 12/7

Released For: Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov