(Reuters) – U.S. employers increased their announced job cuts in November, led by the retail and technology sectors, in a further sign that the labor market is beginning to slacken, a report released on Thursday showed.
Announced job layoffs by U.S.-based employers totaled 45,510 last month, up 24% from 38,836 in October, global outplacement firm Challenger, Gray & Christmas said in the report.
While it was the first time since July the announced cuts were lower than the corresponding month a year ago, the year-to-date tally was the highest since 2020, when the economy was swooning amid the impact of the COVID-19 pandemic.
Hiring plans also appeared to have weakened. U.S. employers in November announced plans to hire 15,566 workers, for a year-to-date total of 775,501. It is the lowest year-to-date total for announced hiring since 2015.
Likewise, seasonal employers have announced 573,300 hires this year through November, the lowest year-to-date tally since 2013.
The Federal Reserve is keenly watching for further indications of labor market cooling as it aims for continued progress in bringing inflation back to its 2% target rate.
The central bank’s rate-hiking campaign over the past 20 months has already borne fruit in lowering inflation to a 3.0% annual rate by the Fed’s preferred measure, less than half its peak in the summer of last year, and the labor market is now steadily slowing too as the surge in borrowing costs dents companies’ spending.
From January to November, companies have announced plans to cut 686,860 jobs, a 115% increase from the 320,173 cuts announced in the same period in 2022.
Job openings fell to a more than 2-1/2-year low of 8.733 million in October, government data showed on Tuesday. There were 1.34 vacancies for every unemployed person, the lowest since August 2021.
The much-anticipated monthly jobs report is scheduled for release on Friday. Economists surveyed by Reuters forecast as of Wednesday that total nonfarm payrolls are estimated to have increased by 180,000 in November after rising 150,000 in the prior month.
“The job market is loosening, and employers are not as quick to hire. The labor market appears to be stabilizing with a more normal churn, though we expect to continue to see layoffs going into the New Year,” said Andrew Challenger, senior vice president at Challenger, Gray & Christmas.
Retailers led the announced layoffs in November, with 6,548 job cuts. Technology sector job cuts, while way off the surge seen from last October through May of this year, still came in second, with 5,049 announced.
The tech sector stands out in 2023 as the weakest by far, with a net drop of 93,000 payroll jobs, according to the Labor Department, a drop of 3%.
(Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci)
