A total of 2.6 million jobs lost in CY2008

unemployment-cartoon

December Nonfarm Payrolls -524K vs -525K consensus, prior revised to -584K from -533K.  

From David Rosenberg, Chief Economist at Merrill Lynch:

“Challenger job layoff announcements surged 275% from year-ago levels to 166K in December, signaling an ongoing deterioration in the labor markets and at an accelerating pace. In short, these figures confirm our forecast for a 550K monthly decline in payrolls along with a rise in the unemployment rate from 6.7% in November to 7.1% in December.

Layoffs in the financial sector led over the month, followed in short order by chemical, retail, and telecom as the economic downturn broadened its reach in depth and scope across all industries. The top two reasons cited for job cuts in December were “market conditions” and “restructuring”, while other firms continued to scale backs wages and benefits to trim costs. For the year in total, layoffs totaled over 1.2M, the highest since 2003 and up from 768K in 2007. Not surprisingly, financial firms led the annual total, accounting for 260K job losses. Cuts in the auto sector, at 127K, were the second largest contributor in 2008 followed by the retail, government, tech and industrial sectors. Looking ahead, we expect to see a higher pace of layoffs with corresponding gains in the unemployment rate through the balance of 2009.

Challenger job layoff announcements surged 275% from year-ago levels to 166K in December, signaling an ongoing deterioration in the labor markets and at an accelerating pace. In short, these figures confirm our forecast for a 550K monthly decline in payrolls along with a rise in the unemployment rate from 6.7% in November to 7.1% in December. Layoffs in the financial sector led over the month, followed in short order by chemical, retail, and telecom as the economic downturn broadened its reach in depth and scope across all industries. The top two reasons cited for job cuts in December were “market conditions” and “restructuring”, while other firms continued to scale backs wages and benefits to trim costs. For the year in total, layoffs totaled over 1.2M, the highest since 2003 and up from 768K in 2007. Not surprisingly, financial firms led the annual total, accounting for 260K job losses. Cuts in the auto sector, at 127K, were the second largest contributor in 2008 followed by the retail, government, tech and industrial sectors.

Looking ahead, we expect to see a higher pace of layoffs with corresponding gains in the unemployment rate through the balance of 2009.For 2008 as a whole, layoff announcements totaled 1.22 million, a five-year high and 59% above the 2007 tally.   That in turn could mean (pro-rating how the Challenger data in 2007 led payrolls in 2008 and shows that we could see 4.5 million employment losses in 2009.  This is what we mean when we say that the upcoming fiscal plan, at best, will be an antidote as opposed to a panacea.  As an aside, Challenger also conducts a survey counting new hiring announcements – that came to a MoM decline of 1,080 in December as well in another sign of decay in terms of labor demand.” OUCH!!!

Economy

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