Evelyn Reynolds

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    in Economy

    Layoffs jump in August while hiring in 2024 is at a historic low, Challenger report shows

    Layoffs soared in August, hitting their highest total for the month in 15 years, while year-to-date hiring hit the lowest in the 19 years of a Challenger, Gray & Christmas survey.
    The report showed the biggest growth in planned layoffs came in the technology field, with companies announcing 41,829 cuts, the most in 20 months.

    Alvaro Gonzalez | Moment | Getty Images

    Layoffs soared in August, hitting their highest total for the month in 15 years, while year-to-date hiring reached a historic low, outplacement firm Challenger, Gray & Christmas reported Thursday.
    Announced job cuts totaled 75,891 for the month, lurching 193% higher than July. Though the total was just 1% higher than the same month in 2023, it was the highest number for August going back to 2009, as the economy was still escaping the worst of the global financial crisis.

    On the hiring front, companies said they were adding just 6,101 new workers, up by nearly 2,500 since July, but down more than 21% from August 2023. The year-to-date hiring announcements of nearly 80,000 is the lowest total in history going back to 2005.
    “August’s surge in job cuts reflects growing economic uncertainty and shifting market dynamics,” said Andrew Challenger, the firm’s senior vice president. “Companies are facing a variety of pressures, from rising operational costs to concerns about a potential economic slowdown, leading them to make tough decisions about workforce management.”
    The report comes with concerns rising that the labor market is weakening even though the U.S. economy has seen growth of 1.4 million in nonfarm payrolls this year. Payrolls processing firm ADP reported Wednesday that private companies added just 99,000 workers in August, the smallest gain since January 2021.
    Markets expect a softening jobs picture to prod the Federal Reserve into lowering interest rates later this month even with inflation running higher than the central bank’s 2% target.
    To be sure, the Challenger layoffs data is somewhat out of sync with government reports, which show that initial claims for unemployment benefits have been slightly elevated in recent weeks but not reflective of a major escalation. For the week ended Aug. 31, jobless claims totaled 227,000, a slight decrease from the previous period.

    Thursday’s report showed the biggest growth in planned layoffs came in the technology field, with companies announcing 41,829 cuts, the most in 20 months.
    “The labor market overall is softening,” Challenger said.
    Companies announcing job cuts most often cited cost-cutting and economic conditions as the reasons, though artificial intelligence also was listed for the first time since April.

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    in Economy

    August private payrolls rose by 99,000, smallest gain since 2021 and far below estimates, ADP says

    Companies hired just 99,000 workers last month, less than the downwardly revised 111,000 in July and below the consensus forecast for 140,000, according to payrolls processing firm ADP.
    The report corroborates multiple data points recently that show hiring has slowed considerably from its blistering pace following the Covid outbreak in early 2020.
    The ADP data showed that while hiring has slowed considerably, only a few sectors reported actual job losses.

    Private sector payrolls grew at the weakest pace in more than three-and-a-half years in August, providing yet another sign of a deteriorating labor market, according to ADP.
    Companies hired just 99,000 workers for the month, less than the downwardly revised 111,000 in July and below the Dow Jones consensus forecast for 140,000.

    August was the weakest month for job growth since January 2021, according to data from the payrolls processing firm.
    “The job market’s downward drift brought us to slower-than-normal hiring after two years of outsized growth,” ADP chief economist Nela Richardson said.
    The report corroborates multiple data points recently that show hiring has slowed considerably from its blistering pace following the Covid outbreak in early 2020.
    Job openings in July also touched their lowest point since January 2021, according to a Labor Department report Wednesday, while outplacement firm Challenger, Gray & Christmas reported Thursday that this was the worst August for layoffs since 2009 and the slowest year for hiring since the firm started tracking the metric in 2005.
    Still, the ADP data showed that while hiring has slowed considerably, only a few sectors reported actual job losses. Professional and business services declined 16,000, manufacturing lost 8,000 and information services declined by 4,000.

    The latest Labor Department data also helped dispel fears of widespread layoffs, as initial claims for unemployment benefits ticked lower to 227,000 for the week ending Aug. 31, slightly below the consensus forecast for 229,000.
    On the upside, education and health services added 29,000, construction increased 27,000 and other services contributed 20,000. Financial activities also saw a gain of 18,000 and trade, transportation and utilities was up 14,000.
    By size, companies that employ fewer than 50 workers reported a loss of 9,000, while those with between 50 and 499 increased by 68,000.
    Wages continued to rise, but continued to show an easing pace than some of the earlier gains. Annual pay increased 4.8% for those who stayed in their jobs, about the same level as July, according to ADP.
    The ADP count now tees up the more closely watched nonfarm payrolls report, which the Bureau of Labor Statistics will release Friday. While the two reports can differ significantly, they were close to perfectly in line for July.
    The consensus forecast is for payrolls to have increased by 161,000, after rising by 114,000 in July, with a tick down in the unemployment rate to 4.2%, though the recent data could add some downside risk to the estimate. Private payrolls grew by just 97,000 in July, according to the BLS.
    Markets expect the weakening jobs picture to push the Federal Reserve into lowering interest rates when it meets Sept. 17-18. The main question is how quickly and how aggressively the Fed will move, with current market pricing indicating at least a quarter percentage point cut at this month’s meeting and a full percentage point lopped off the federal funds rate by the end of 2024.
    ADP reported that it conducted a rebenchmarking of its data based on the Quarterly Census of Employment and Wages, resulting in a decline of 9,000 jobs for the August report. A similar adjustment from the BLS indicated that nonfarm payrolls had been overcounted by 818,000 between April 2023 and March 2024. ADP will do a full-year adjustment in February 2025. More

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    Job Hunting Is a Challenge for Recent College Grads

    Unemployment is still low, but job seekers are competing for fewer openings, and hiring is sluggish. That’s a big turnaround from recent years.For much of the last three years, employers were fighting one another for workers. Now the tables have turned a bit. Few employers are firing. Layoff rates remain near record lows. But fewer employers are hiring.That has left job seekers, employed or unemployed, competing for limited openings. And younger, less experienced applicants — even those with freshly obtained college degrees — have been feeling left out.A spring survey of employers by the National Association of Colleges and Employers found that hiring projections for this year’s college graduating class were below last year’s. And it showed that finance, insurance and real estate organizations were planning a 14.5 percent decrease in hiring this year, a sharp U-turn from its 16.7 percent increase last year.Separately, the latest report from the Bureau of Labor Statistics shows the overall pace of hiring in professional and business services — a go-to for many young graduates — is down to levels not seen since 2009.For recent graduates, ages 22 to 27, rates of unemployment and underemployment (defined as the share of graduates working in jobs that typically do not require a college degree) have risen slightly since 2023, according to government data.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    BLS Data on Jobs and Consumer Prices Faces a Test of Trust

    The Bureau of Labor Statistics, which tracks prices and employment, faces scrutiny after several missteps. Some questions have gone unanswered.It has been a rough year for the Bureau of Labor Statistics.The agency — which produces key numbers on inflation, unemployment and other aspects of the economy — has made a series of missteps in recent months, including a premature release of the Consumer Price Index.That has prompted questions about how the bureau, which is part of the Labor Department, shares information and whether it has been giving an unfair advantage to Wall Street insiders who can profit from it. The agency’s inspector general is looking into the incidents. So is at least one congressional committee.At the same time, the bureau — like other statistical agencies in the United States and around the world — is facing long-running challenges: shrinking budgets, declining response rates to its surveys, shifting economic patterns in the wake of the pandemic and increased public skepticism of its numbers, at times stoked by political leaders including former President Donald J. Trump.Economists and other experts say the bureau’s data remains reliable, and they praise the agency’s efforts to ensure its numbers are accurate and free of political bias. But they say the recent problems threaten to undermine confidence in the agency, and in government statistics more broadly.“A statistical agency lives or dies by trust,” said Erica Groshen, who served as commissioner of the Bureau of Labor Statistics during the Obama administration. Once that trust is lost, she added, “it’s very hard to restore it.”The agency recognizes that threat, its current leader says, and is taking it seriously.“We are under more scrutiny because the environment around the agency has changed,” Erika McEntarfer, the commissioner of the bureau, said in an interview.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Why This Jobs Report Could Be the Most Pivotal One in Years

    It’s tough to overstate how much hinges on Friday’s employment update, from the path for interest rates to the economic outlook.A fresh jobs report set for release on Friday could mark a turning point for the American economy, making it one of the most important and closely watched pieces of data in years.The employment numbers will shed crucial light on whether a recent jump in the unemployment rate, which tracks the share of people who are looking for work but have not yet found it, was a blip or the start of a problematic trend.The jobless rate rose notably in July after a year of creeping higher. If that continued in August, economists are likely to increasingly worry that the United States may be in — or nearing — the early stages of a recession. But if the rate stabilized or ticked down, as economists forecast, July’s weak numbers are likely to be viewed as a false alarm.The answer is coming at a pivotal moment, as the Federal Reserve moves toward its first rate cut since the 2020 pandemic.Central bankers have been clear that they will lower interest rates at their meeting on Sept. 17-18. Whether that cut is a normal quarter-point reduction or a larger half-point move could hinge on how well the job market is holding up. It is rare for so much to ride on a single data point.“It matters a lot,” said Julia Coronado, founder of MacroPolicy Perspectives, a research firm. “It’s going to set the tone for the Fed, and that’s going to set the tone for global monetary policy and markets.”Unemployment and UnderemploymentThe jobless rate historically jumps during recessions.

    Unemployment is the share of people actively looking for work; underemployment also includes people who are no longer actively looking and those who work part time but would prefer full-time jobs.Source: Bureau of Labor StatisticsBy The New York TimesWe are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Biden Expected to Block U.S. Steel Takeover by Nippon

    The Committee on Foreign Investment in the United States is expected to raise national security concerns about selling the iconic steel producer to Japan’s Nippon Steel.President Biden is preparing to soon block an attempt by Japan’s Nippon Steel to buy U.S. Steel on national security grounds, according to three people familiar with the matter, likely sinking a merger that became entangled in election-year politics in the United States.A decision to block the takeover would come after months of wrangling among lawmakers, business leaders and labor officials over whether a corporate acquisition by a company based in Japan — a key U.S. ally — could pose a threat to national security. A move by Mr. Biden to block the deal on those grounds could roil relations between the two nations at a moment when the United States has been trying to deepen ties with Japan amid China’s growing influence in East Asia.For months, the Committee on Foreign Investment in the United States, or CFIUS, has been scrutinizing the deal over potential risks. There has been mounting speculation that the Biden administration could intervene before the November election.A White House official told The New York Times that CFIUS “hasn’t transmitted a recommendation to the president, and that’s the next step in this process.”CFIUS is made up of members of the State, Defense, Justice, Commerce, Energy and Homeland Security Departments, and is led by the Treasury secretary, Janet L. Yellen.The committee sent a letter to U.S. Steel in recent weeks saying that it had found national security concerns with the transaction, one of the people familiar with the situation said.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access. If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe. More

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    Bond market ‘yield curve’ returns to normal from inverted state that had raised recession fears

    A trader signals an offer in the Standard & Poor’s 500 stock index futures pit at the CME Group in Chicago on Dec. 14, 2010.
    Scott Olson | Getty Images News | Getty Images

    The relationship between the 10- and 2-year Treasury yield briefly normalized Wednesday, reversing a classic recession indicator.
    Following economic news that showed a sharp decline in job openings and dovish remarks from Atlanta Fed President Raphael Bostic, the benchmark 10-year yield inched above the 2-year for the first time since June 2022.

    The respective yields were both around 3.79% on the session, with just a few thousandths of a percentage point separating them.

    Stock chart icon

    10-year yield vs. the 2-year

    An inverted yield curve, in which the nearer-duration yield is higher, has signaled most recessions since World War II. The reason why shorter-duration yields rose above their longer-duration counterparts is essentially the result of traders pricing in slower growth out into the future.
    However, a normalization of the curve does not necessary signal good times ahead. In fact, the curve usually does revert before a recession hits, meaning the U.S. could still be in for some rough economic waters ahead.
    “If you don’t have any sense of history regarding the economy, needless to say it would be positive,” said Quincy Krosby, chief global strategist at LPL Financial. “However, statistically the yield curve will normalize as the economy actually does go into a recession or is in a recession simply because the Fed is going to be cutting rates” in response to a slowing economy.
    The price action followed a Labor Department report showing that job openings unexpectedly slid below 7.7 million in July, bringing supply and demand almost even following a severe imbalance since the Covid crisis. Job openings had exceeded labor supply by more than 2 to 1 at one point, aggravating inflation that had been at its highest level in more than 40 years.

    At the same time, Atlanta Federal Reserve President Raphael Bostic released comments, around the same time the job openings report dropped, indicating that he’s ready to start reducing rates even with inflation running above the central bank’s 2% goal.
    Lower rates are seen as a boost for economic growth; the Fed has held its benchmark rate at its highest level in 23 years since July 2023, targeted in a range between 5.25%-5.5%.
    While the market most closely watches the relationship between the 2-year and 10-year, the Fed more closely observes the relationship between the 3-month and 10-year. That part of the curve is still steeply inverted, with the difference now at more than 1.3 percentage points.

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    Job openings fell more than expected in July in another sign of labor market softening

    Job openings slumped to their lowest level in 3½ years in July, the Labor Department reported Wednesday in another sign of slack in the labor market.
    The department’s closely watched Job Openings and Labor Turnover Survey showed that available positions fell to 7.67 million on the month, off 237,000 from June’s downwardly revised number and the lowest level since January 2021.

    Economists surveyed by Dow Jones had been looking for 8.1 million.
    With the decline, it brought the ratio of job openings per available worker down to less than 1.1, about half where it was from its peak of more than 2 to 1 in early 2022.
    The data likely provides further ammunition to Federal Reserve officials who are widely expected to begin lowering interest rates when they meet for their next policy meeting on Sept. 17-18. Fed officials watch the JOLTS report closely as an indicator of labor market strength.
    “The labor market is no longer cooling down to its pre-pandemic temperature, it’s dropped past it,” said Nick Bunker, head of economic research at the Indeed Hiring Lab. “Nobody, and certainly not policymakers at the Federal Reserve, should want the labor market to get any cooler at this point.”
    While the job openings level declined, layoffs increased to 1.76 million, up 202,000 from June. Total separations jumped by 336,000, pushing the separations rate as a share of the labor force up to 3.4%. However, hires rose as well, up 273,000 on the month, putting the rate at 3.5% or 0.2 percentage point better than June.

    The professional and business services sector showed the biggest increase in openings with 178,000. On the down side, private education and health services fell by 196,000, trade, transportation and utilities declined 157,000 and government, a leading source of job gains over the past few years, was off by 92,000.
    Though the report adds to concerns that the economy is slowing, it “does not suggest any rapid deterioration in the labor market,” Krishna Guha, head of the Global Policy and Central Bank Strategy Team at Evercore ISI, said in a client note.
    “The still low level of layoffs and tick up in hires suggests the labor market is not cracking. But demand for workers continues to soften relative to the supply of workers, and a forward perspective suggests this is likely to continue under restrictive policy,” he added.
    The report comes two days ahead of the pivotal August nonfarm payrolls count that the Labor Department will release Friday. The report is expected to show an increase of 161,000 and a tick down in the unemployment rate to 4.2%.

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