American Companies Post Most Layoffs Since the Financial Crisis
The U.S. job market has been a growth engine of the U.S. economy since the Great Recession. The unemployment rate in May was 3.6%, near the lowest levels in decades, according to the U.S. Bureau of Labor Statistics. However, economists worry that the recovery may stall because of factors that include slower corporate earnings and the trade war with China.
There is evidence that anxiety is warranted. First-half job cuts were at their highest level since the first half of 2009, according to new research.
Jobs outsourcing firm Challenger, Gray & Christmas has kept layoff data by month for years. Its researchers wrote, “So far this year, employers have announced plans to cut 330,987 jobs, a 35% increase from the 245,179 cuts announced through the first half of last year. This year marks the highest first-half total since 2009, when 896,675 job cuts were announced.” Second-quarter numbers were not much better. Cuts for the period rose 34% from the same period in 2018, when the figure was 104,800.
Job cuts in retail continue to be large. They reached 53,248 in the first half, on top of 73,066 in the same period last year. Retailers continue to close hundreds of locations, and it appears that trend will continue for the balance of the year. Retailers closing the most stores already have announced they will close hundreds this year.
Cuts in the automotive industry were also high, and much higher than in the first half a year ago. In January to June of this year, they totaled 32,350, up from 11,165 in the first half of 2018. Andrew Challenger, vice president at Challenger, Gray & Christmas, commented, “Manufacturers are grappling with not only technological changes, but also increased competition, tariffs, changes in consumer behavior, and skills shortages. The Automotive sector particularly has experienced some setbacks, as consumer demand for traditional vehicles wanes.” June car sales helped support that point of view. The auto sector may continue to be hit by tariffs that could drag on for months or longer.
For the entire year, the trend of cuts may outpace 2018. The 330,987 for the first half of this year compares to 538,659 for all of last year. This could be a particular problem among people with the worst jobs in America, where employment security is low.