Labor Market Suffers Through Ongoing Job Cuts in November
Planned job cuts fell 0.9 percent on the month and 21 percent on the year to 45,314 in November, according to consultancy firm Challenger, Gray & Christmas. Year-to-date announced job cuts are down 2.5 percent at 478,428, just 44,934 shy of last year’s 523,362 announced layoffs.
The sectors that took the heaviest beatings on the job front in September were retail and aerospace and defense. The decline in retail is somewhat surprising given November-December numbers are usually drenched in seasonal holiday hiring, but John Challenger, CEO of the consultancy, pointed to a significant onetime event affecting layoffs.
“Safeway Inc. plans to close all of its Dominick’s grocery stores in the Chicagoland area, shedding 5,633 workers from its payroll,” he said in a press release. “However, there is a good chance that many of these workers will be re-hired by the several grocery-store operators that have agreed to purchase and take over many of the Dominick’s locations,” which suggests that the layoffs may be temporary.
After falling by around 8 percent in the wake of the financial crisis, total retail employment is about 1.8 percent shy of its pre-crisis levels.
The high level of job cuts in the aerospace and defense sector has been a long time coming, and the tedious monster called sequestration is largely to blame. The aerospace sector announced 33,850 job cuts this year to date, according to Challenger, Gray & Christmas, and cuts are on track to be the highest since 2009. The firm points specifically at plant closures at Lockheed Martin.
The estimate is a little stale by this point, but in February, the Congressional Budget Office calculated that ending sequestration could result is as many as 750,000 total jobs saved. In July, Senate Majority Leader Harry Reid (D-Nev.) said that sequestration had already destroyed 1.6 million jobs, a figure that doesn’t seem to be grounded in reality.
The real loser this year, though, is the financial sector. “Many of the recent cuts have been concentrated in the mortgage lending business, as banks shed many of the extra workers added to handle the flood of foreclosures and loan refinancing in the wake of the recession,” said John Challenger. “Recent increases in lending rates and home prices are also lowering demand for new mortgages, thus further reducing the need for additional workers.”