Mass Layoff Events October 2009

20 11 2009

Today the US Department of Labor – Bureau of Labor Statistics reported the October Mass Layoff Events (here are the Sept and Aug blogs).  We have watched this since late last year when the number of events crossed the 2,000 mark.  This marks our 14 month in a row where we have exceeded that level.  While this is still an alarming rate of Layoff Events at least we can say that the trend could be moving in the direction of dropping below the 2,000 next month.

I still have concerns about the state of the US Economy as we approach the end of the year.  If I were to guess, I think we will see this number drop below 2,000 for November, but return to greater than 2,000 in December and/or January.

Mass Layoffs Jan 2010

1 03 2010

Sorry I have been a little short on blogs the last few weeks…

The US Department of Labor – Bureau of Statistics released the January Mass Layoff Events data for January.  I have been watching the Mass Layoff events for a while now for a couple of reasons, but primarily as a leading indicator of the economy.  I spoke last year a great deal how the number had exceeded 2000 events for 12 straight months and how this was most likely a sign of a protracted recovery period.   The January number was 1,761 which was roughly the same for the last three months.  While the move under 2,000 was at least a step in the right direction it appears as if we continue at an elevated rate.

Job creation is one of the primary keys to economic recovery and it seems as if we are still shedding above normal levels of jobs.   Continuing at 1,700+ events (which in Jan actually meant 180,000 claimants – or an annualized number of over 2 mil initial claimants.  The point is that I feel the economic climate is still contracting, though perhaps at now slower rates.

From a street level assessment I am starting to hear of more projects starting, consulting firms seems to be a little more optimistic outlook for the year, and less people concerned about their current state.

Mass Layoffs Nov 2009

23 12 2009

Yesterday, the Department of Labor Bureau of Labor Statistics released the November Mass Layoff Report.  The news was upbeat in that the trend continues to get better (meaning fewer mass layoff events) with only 1,797 events.  We have spoken about 2,000 events as being extremely high and November was the first time in the last 14 months that the number dropped below 2,000.  The bad news is this is still higher than 80% of the monthly numbers since 1999 so the numbers are again not positive, just less negative.

One bit of interesting news is that the number of layoffs (officially claimants) per event was at one of its lowest levels since the beginning of 1999.  This means that while the number of layoff events is still high, there were fewer claimants per event (fewer people laid off or more found something else), or that instead of 200,000 claimants, we saw only 165,346.  This number is a healthier indicator than the number of events (see the dotted red lines in the chart below and compare the crimson line and the blue line from the chart above).

Mass Layoffs Sept 2009

22 10 2009

The Bureau of Labor Statistics today announced the Mass Layoffs from September.  The number of events (more than 50 people laid off) is down a little from August, but we are still seeing much larger levels than normal.  The September number of 2,561 layoff events is roughly 2x the normal average.

This is a slight sign the economy may be bottoming out.  What is still disturbing here is the consistency of the level of mass layoffs.  For the last 12 months (see blue box in chart) we have had over 2,000 events per month compared to a normal level of 1,250.  We are still adding too many people to the unemployed – and a system that is built to run on full employment.  Over the last 20 years we have only seen two other spikes, yet in both of those periods we only saw a brief period of spike.  And again in neither of those cases did we ever reach 2,500 events.  Over the last 12 months we have seen 5 months in excess of 2,500 events.  Not good news on any front.

Quite soon, we need to see a substantial drop in Mass Layoffs to give us a positive  indicator that the economy is turning around.  We see a good number of positive signs, but this one is still a big red flag.  Again, if we look at the post 9/11 trend you can tell this trend tapers back to normal.  Mass Layoff Events Sept 2009

Mass Layoffs August 2009

24 09 2009

Yesterday the Mass Layoff report was issued by the United States Department of Labor – Bureau of Labor Statistics.  The data here is interesting in a few ways.  The Mass Layoff report highlights the number of events where 50 or people were laid off by the same firm.

  • Perhaps a little good news for the US economy
  • A little analytics lesson

First off, the US Economy.  We can look at a couple of things here that probably tell us the situation is still bad, but perhaps another indicator that we are rebounding.  In the first chart, the bars represent the events (not total layoffs – but the numbers are highly related).  You can see that the number for August appears to be quite a bit better than July and the previous 12 months, but August is also lower in general.  When you consider the raw volume of the last 12 months, perhaps we just ran out of people to layoff.  My initial assessment is that while it looks like we are heading in the right direction, we may just be witnessing the normal August dip.  Call it cautious optimism.

Aug 2009 Mass Layoff Peaks

Now looking at the data from a visual standpoint…below is how we typically look at this type of data.  Here we would conclude that things look like we have hit bottom and are moving in the right direction.

Aug 2009 Mass Layoff Raw Data1

Yet if we look a little more closely at the data above (and perhaps dig at some of the underlying regional or industry data) we can make a lot of different potential comments.

  • We are coming out of a major event – any data is going to be a little blurry.  Any investments are going to be risky, but with that risk comes the upside reward of potentially being a first mover.
  • The general trend might be improving, but the volumes are still way above normal levels.  How long can we continue to shed people like we have for the last 12 months?
  • The peaks and troughs also show that we are still greater than 2x normal levels.  Clearly, there are still problems in the economy.

Recession is OVER!!!

27 09 2010

Perhaps not all signs agree with the National Bureau of Economic Research that the recession ended in June 2009. It is pretty clear that the economy is still not as healthy as everyone would like.  Our unemployment rate is still hovering around 10%, and Mass Layoffs is trending in the right direction, but still high.  Looking at the chart below, it is clear that Mass Layoff events are declining (though there could be some other explanations as well) and getting closer to the roughly 1250 average during better times.

Housing starts are on the rise again, yet the DJIA has only recovered a little of the value from the losses from 2008 and early 2009.  While we may still may be feeling the effects of the recession, it is clear that most indications are moving in the right direction.