An unemployment review conducted by outplacement consultancy Challenger, Gray & Christmas, which tracks job cut plans rather following the BLS method of compiling current dismissal statistics, said the number of announced lay offs actually fell in June. Challenger said June represented a 15-month low in layoff announcements across the economy, at 74,393, which it contends provides evidence that the worst of the economic crisis may have passed even if the BLS numbers did set Wall Street investors scurrying Thursday to sell off shares.
In the Challenger study, the number of job cuts announced in June was 33 percent lower than the 111,182 layoffs announced in May and marked the first time since September that the monthly tally was less than 100,000.
The June job cut total was the lowest since 53,579 layoffs were announced in March 2008. It was nine percent lower than the same month a year ago, when 81,755 job cuts were revealed. The firm stated that the last time a current month had lower announced job cuts versus the year earlier was in February 2008. Overall job cut reports have declined each month since reaching a seven-year high of 241,749 in January.
In the retail industry, announced layoffs were lower in June, at 3,566, than for the same period in the two years preceding, when they registered as 4,973 and 3,743 respectively. Looking back a bit further, May's 2,657 announced layoffs also beat totals for that month as recorded in 2008 and 2009. May also was the first month when announced retail layoffs were lower than the month a year earlier.
Still, the BLS unemployment numbers in June gave Wall Street and a lot of other interested parties a jolt. Drawing conclusions from all the numbers is difficult, of course, but they are consistent with the opinion of some economists that the recession would bottom out this summer and that the season would witness a bit of bouncing around on the economic floor before a slow recovery began to take hold.
For retail, the fact that the back to school season seems to be arriving right at the bottom of the economic cycle could be instructive. Once again, it seems as if back to school may be the best indicator of what the second half of the year, and the holiday season, will bring to retail. After all, kids have been one of the focal points of spending in the recession, along with home entertainment and pets. If folks are reluctant to spend on their kids going back to school, its hard to believe they'll shell out heavily for toys and electronics given the trend toward conspicuous virtue -- which might be defined as frugality livened by moderate indulgence for the family's sake -- that has been evident at retail. If the Challenger numbers do portend an easing of unemployment growth, consumers may gain additional confidence in the economy and make a bigger second half contribution to recovery and retail coffers. If that's going to happen, though, it had better do so quickly if holiday 2009 is to be salvaged.