Street Calls of the Week
Investing.com - Layoffs announced by U.S. employers fell in September, according to private-label data on Thursday that will be in focus for investors as several upcoming official labor market reports are likely to be delayed because of an ongoing U.S. government shutdown.
Global outplacement firm Challenger, Gray & Christmas said on Thursday that planned job cuts decreased 37% to 54,064 last month. It is down by 26% from the same month a year ago.
For the third quarter, the number totaled 202,118, the highest third-quarter tally since 2020, when the economy was mired in the COVID-19 pandemic. So far this year, companies have announced 946,426 job cuts, the highest such level since 2020 as well.
An ongoing push by the White House to slash the size of the federal workforce, along with market and economic conditions, were the two leading cuases of job cut announcements in 2025, the report said. Year-to-date, employers are also looking to add 58% fewer jobs compared to the timeframe through September 2024.
In a statement, Challenger, Gray & Christmas Senior Vice President Andy Challenger said "it’s very likely job cut plans are going to surpass a million for the first time since 2020," flagging that previous periods with this many reductions in roles occurred either during recessions or, as was the case in 2005 and 2006, "during the first wave of automations that cost jobs in manufacturing and technology."
"Right now, we’re dealing with a stagnating labor market, cost increases, and a transformative new technology," he added. "With rate cuts on the way, we may see some stabilizing in the job market in the fourth quarter, but other factors could keep employers planning layoffs or holding off hiring.”
The Federal Reserve has cited a need to support a cooling labor market as a key factor behind its decision to roll out a 25-basis point interest rate cut last month. Policymakers also indicated that further drawdowns may be coming before the end of the year.
With official employment data, including the all-important nonfarm payrolls report, now likely suspended by the shutdown, Chicago Fed President Austan Goolsbee has suggested that U.S. central bankers will have to seek out alternative data sources before their upcoming gathering later this month.