US employers announced fewer layoffs in July than last year, marking the first year-over-year decrease in more than a year and bolstering the prospect that a resilient labour market will protect the economy from recession. Will help you escape.
US-based employers announced 23,697 job cuts in July, down 42% from the number of layoffs announced in June and 8% from July 2022, according to a report released Thursday by employment firm Challenger, Gray & Christmas. This was the first year-over-year decrease since May 2022, and July also saw the fewest announced layoffs since August last year.
The Fed’s aggressive interest rate hike campaign beginning in March 2022 has led many economists to predict that it will eventually lead to a recession. Indeed, the year began with an announcement of layoffs during the first quarter. So far this year, more than three times as many job cuts have been announced as compared to last year.
481,906 job cuts have been announced in the first seven months of 2023, while 159,021 job cuts have been announced in the same period in 2022. But this trend seems to be coming to an end. Companies, tired of laying off essential employees, are looking for other ways to cut costs.
Hiring has slowed for many, but salaries continue to rise, especially for the lowest-paid, said Andy Challenger, senior vice president at Challenger, Gray & Christmas. The technology sector continued to lead all industries in cuts, accounting for nearly a third of the announced layoffs in 2023. Most of the employers who cited the reason for layoffs in July cited business closures, followed by economic conditions in the market.
The decline in layoffs last month coincides with other signs of continued labour market strength. On Wednesday, payroll processor ADP estimated that 324,000 private sector jobs were added in July. On Friday, the Labor Department is set to release its widely watched monthly unemployment data and payroll changes. Economists forecast that 200,000 jobs would be added in July, down slightly from the 209,000 added in June, and that the unemployment rate would remain unchanged at 3.6%.