For nearly two months, a slew of big American and foreign companies have been announcing major layoffs, clouding the outlook for the employment picture.
According to a report by outplacement consultancy Challenger, Gray & Christmas, September saw a 43 percent increase from the previous month in terms of job cuts. And cuts were 93 percent higher than the 30,477 planned layoffs announced the same month a year ago.
“You don’t want to overexaggerate, but there’s no question that layoffs are heavier this year,” said CEO John Challenger. “It suggests more pressure on companies that aren’t performing as well to take action now.”
The third quarter of 2015 was the worst in terms of job cuts since the third quarter of 2009, the report found. So far this year, there have been more layoffs announced than in the full year of 2014.
Increased mergers and acquisitions activity has also led to consolidation and sometimes widespread job cuts. Challenger also points to an economy in the late stages of a recovery cycle. “We may be in the seventh inning of the expansion cycle and some companies simply can’t make it.”
Jobless claims at lows
The higher number of layoffs seems, at the surface, odd as weekly jobless claims fall to historic lows.
In fact, the four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, slipped 2,000 to 263,250 last week, the lowest level since December 1973.
Challenger said that even though more people are being laid off, they are wading in the unemployment pool for shorter periods.
“It means that people are getting picked up quickly,” he said. “Even with the heavier layoffs more people in a tight labor market can make quicker transitions.”
According to the Bureau of Labor Statistics, the average duration of unemployment was 26.3 weeks in September, compared with 31.8 weeks for the same period in 2014.
“It’s never easy to lose your job, but prospects for long-term unemployment are much better than they have been for a while,” Challenger said. “Ironically, the layoffs aren’t as bad as long as people don’t get stuck unemployed for too long.”
The odds are especially bright for skilled workers, he said. “Skilled workers are the fuel of this economy.”
But Challenger said that the rest of the year could see many more layoffs as companies reassess their full-year guidance numbers. He said that most cuts will probably be announced before the Thanksgiving holiday.
— CNBC’s Mark Fahey and Reuters contributed to this report.