The outplacement firm of Challenger, Gray & Christmas on Thursday reported that announced job losses last month represented the highest August total since 2002. For the year to date, more than 1.96 million job cuts have been announced, more than triple the 592,556 jobs lost in all of 2019.
U.S. employers announced 115,762 job cuts in August, a decline of 56% from July’s total of 262,649 job losses. The August total represents a year-over-year increase for the month of 116%.
Andrew Challenger, vice president of the outplacement firm, noted that more companies that had initially made temporary cuts or furloughed workers are now making permanent layoffs. He also commented that both employers and employees are “grappling with increasing uncertainty due to stalled economic relief, the approaching election, and child care and education concerns.”
In August, COVID-19 was named as the cause of 8,490 job cuts, while another 29,982 were attributed to lack of demand and nearly 45,000 were attributed to market conditions. For the first eight months of 2020, the coronavirus pandemic is responsible for nearly 1.1 million job losses.
Industry sectors hit hardest in August were transportation (26,545 announced job cuts), entertainment/leisure (17,271) and government (14,249). For the year to date, the entertainment/leisure sector has lost 799,051 jobs, a year-over-year increase of more than 8,200%.
So far this year, U.S. firms have announced plans to hire 1.74 million workers, including 160,411 hiring announcements announced in August. More than 800,000 of those new jobs were announced in March and were directly the result of the COVID-19 outbreak.
California-based employers announced the most job cuts in August with 29,832 planned cuts. Washington, D.C., with 13,360 planned cuts, New York (10,428), Massachusetts (8,098) and Florida (6,944) round out the five states losing the most jobs in August.
Wednesday morning, ADP reported that private-sector payrolls increased month over month in August by 428,000, well short of expectations for a gain of more than a million. The weekly report on new claims for unemployment benefits is due Thursday morning, and the consensus estimate calls for 958,000 new claims filed in the week ending August 29. The monthly employment situation is due Friday morning, and analysts expect nonfarm payrolls to rise by 1.4 million and the unemployment rate for August to drop to 9.8%.