Wednesday, June 3, 2009

Corporate Lay-offs Dropping

From Marketwatch:

Planned corporate layoffs declined 16% in May from April to 111,182, the lowest total since September, according to an unscientific tally released Wednesday by outplacement firm Challenger Gray & Christmas.

Job-reduction announcements were up 7.4% compared with May 2008.

So far in 2009, planned layoffs of 822,282 as tallied by Chicago-based Challenger Gray are more than twice as high as they were over the first five months of 2008, with layoffs having peaked in January at 241,749.

The figures are not seasonally adjusted.

"This decline in job cuts could be short-lived," said John Challenger, CEO of the outplacement firm. He noted that the second quarter of the year is typically the slowest for layoffs; the fourth quarter ranks as the busiest.

In particular, more layoffs could be coming in state and local governments, auto manufacturing and retailing, he said.

I've turned moderately bullish of late. What started this off was this chart:

Click for a larger image.

Notice the 4-week moving average which appears to have topped. This jibes with the article which is noting we're seeing a preliminary reduction in corporate lay-offs. Also note -- the year over year levels are still high and unemployment is still at 8.9% so we're nowhere near out of the woods.

I would call this period the initial moves back into positive growth. There are still plenty of things that can go wrong -- like the bankruptcy of a major car company sending very negative ripples out across the economy. But the initial moves are encouraging.