– Total 2015 Job Cuts To Be Biggest Since 2009: Challenger (ZeroHedge, Sept 3, 2015):
Moments ago Challenger reported August job cuts, which at 41,186 were a 60% drop from the 115,730 reported last month (the highest since September 2011), which however was driven by a one-time mass layoffs last month in military staffing. Putting August in its correct perspective, the number was 2.9% higher than the same month a year ago, when 40,010 planned job cuts were announced.
What is troubling is that this marks the seventh month this year that the job-cut total was higher than the comparable month from 2014.
What is worse is that for all the euphoria about initial claims printing at or near record lows, the reality as measured from the bottom-up, is far different and as Challenger notes, so far in 2015 employers have announced 434,554 job cuts: that is up 31 percent from the 332,931 planned layoffs in the first eight months of 2014.
What is worst, and what reveals the true picture of the economy, is that with monthly totals averaging 54,319, 2015 job cuts are on track to exceed 650,000 for the year, which would be the highest year-end tally since 2009 (1,272,030).
In other words, not only is the economy no longer growing at its previous pace, but due to the ongoing oil rout, tens of thousands of highly-paid workers mostly in the oil space are getting pink slips just as the Fed is preparing to tighten. Putting a number to that estimate, Challenger says that “since the beginning of the year, oil prices have been blamed for 82,268 layoffs, mostly in the energy sector, but also among industrial goods manufacturers that supply equipment and materials for oil exploration and extraction.”
Curiously, the biggest culprit for August job cuts was not the energy sector (expect many more layoffs here), but retail. The retail sector saw the heaviest job cutting in August, with 9,601 planned layoffs reported during the month. Most of those were related to bankruptcy of east coast supermarket chain A&P, which is closing more than 100 stores and laying off a reported 8,500 workers by Thanksgiving.
The retail sector has announced 57,363 job cuts so far this year, which is a 90 percent increase over the 30,109 job cuts announced by this point in 2014.
“Overall, retail is relatively healthy, but we have seen some big layoffs this year, particularly from long-time players that simply have not been able to keep up with changing consumer trends. These retailers somehow manage to survive, but only through multiple bankruptcies, such as A&P. Earlier this year RadioShack announced 5,400 job cuts,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
The industrial goods sector saw the second heaviest downsizing activity in August, announcing 7,949 layoffs during the month. That is the largest number of job cuts for this sector since March, when 9,163 job cuts were announced.
Finally, going back to oil, Challenger was optimistic, however this optimism is misplaced. This is what it said:
“The stream of job cuts related to oil prices appears to be ebbing. The majority of these cuts came in the first four months of 2015, when we saw more than 68,000 layoffs related to oil. Since May, fewer than 14,000 job cuts have been attributed to oil prices,” noted Challenger.
There is a problem: as ConocoPhillips just announced two days ago when it fired 10% of its global workforce, oil companies which had been betting on an oil rebound, all got flatfooted by the second drop in oil price. This will lead to tens of thousands of more highly paid jobs being pink slipped in the coming months.
“It is too soon to say if we have seen the last of the big oil cuts. As we head into the final months of 2015, there are definitely some red flags that suggest we may see more layoffs from the energy sector, as well as in other areas of the economy. The problems that China is facing could send shockwaves throughout the global economy, including the United States,” Challenger continued.
Finally, one thing that is certain: of all states, Texas continues to bear the brunt of the layoff pain. And if oil continues trading in the $30/$40 range, the pain is far from over.
This article is an excellent example of decorating the dining room while the house is burning to the ground. The true unemployment rate in this nation is close to 50%. Of slightly over 200 million working age Americans, 93.8 million are struggling with long term unemployment, taking temp work to keep body and soul together. The numbers cited in this article are laughable.
When I entered the workforce many years ago, I soon discovered I didn’t like being an employee. I had a good education and could support myself & child well as an independent contractor, and in my line of work, it was a valuable part of the economic process. We paid for our own insurance, we had no benefits beyond what we provided for ourselves. We filed taxes every three months, it was an involved process. It was never intended for the average worker who needed the protection a good employer gave them.
Today, millions of low wage workers are now categorized as independent contractors so the greedy corporations don’t have to pay any benefits for them. They are earning subsistence pay, struggle to keep themselves and families with a roof over their heads and enough food…….The so-called temp worker industry makes up countless millions, but corporations who use them pay nothing for their future. House cleaners, fast food workers, taxi drivers, maintenance workers, gardeners, construction workers…. temporary workers of many fields……………the list is endless. None of them would qualify under the original independent contractor definition as put out by the IRS 40 years ago.
Millions of former highly paid workers now work part time as independents for pennies of their former earning, if they can get the work. This is driving wages down as survival costs (food, shelter, etc) continue to skyrocket.
These numbers in this article must only apply to people who were actual employees, not the hundreds of millions I have just described.
As for the oil industry stabilizing, if Tesla has indeed mastered Fuel Cell technology, oil will soon be an energy source of the past……Fuel cell technology will revolutionized how we heat and cool our homes, our lighting, traveling……..it is a technology I have been tracking since 2000…..I am delighted to see it coming into reality.
As for retailers, their stores are also full of temp workers, and unless they make it worthwhile to go and shop, the Internet will continue to gain more shoppers.
Automotive is losing workers, no real surprise considering the real economy which this article touches upon, but doesn’t really address. Tesla sells their beautiful cars online, they have no agencies…..and they have a waiting list. They are coming out with a $30K vehicle soon, and when they do, they will be everywhere…..$30K figured over ten years or more of usage isn’t a bad price, assuming one has the resources……..and therein lies the rub.
The biggest job cutter isn’t addressed at all by the writer……….Government jobs are vanishing at record rates. All of those bureaucrats cut loose into a pool of corporate sharks.
Industrial goods are sliding because the world economy has stalled. Retail is cutting jobs not just because of A & W groceries on the east coast…..Stores like Macy are closing and condensing outlets as buyers continue to migrate online for better selections and prices.
The global economy, blown up by wild speculation is contracting at record rates……The fear rate, the VIX hit 32 a couple of days ago…..they call it volatility……
The US economy has been gutted. The only remaining product being sold from here is debt, and debt is only good as long as the debtor can pay……..50% real unemployment, and the media insists the US economy won’t be affected by the global stall………….Santa Claus is coming in December, the Easter bunny in Spring……..We have lost our economic base, the world is using alternatives to the dollar, and our debt level (like the EU) now exceeds 100% of GDP. All funds coming in are owed elsewhere; debt is destroying us.
A category that was once enjoyed by a few is now the prison of millions……
If one looks at the Initial Jobless Claims put out by another economic sector, it is in the hundreds of thousands a week…..at least 800K a month. Some of them do get rehired, but there is a growing of them who become low wage, so called independent contractors.
On the World economy, this is a huge story, and if it does happen, the US dollar will lose one of its most stalwart supporters, Japan.
If Japan adopts the electronic currency no media will discuss (regardless most nations now use it in lieu of the US dollar), and join with the east in direct trade, leaving the dollar out, the US dollar will be down to itself (the USA) and the struggling Euro zone.
This would be a huge blow for the power of the dollar. Until Fukushima, Japan was the biggest US lender and dollar holder……..
Why is nobody covering this story?
https://www.rt.com/business/314193-japan-russia-swap-sanctions/