Economy

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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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

Unlock the Editor’s Digest for freeRoula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.The writer is chief global strategist at BCA ResearchIf one places a warm glass of water in a freezer, its temperature will steadily decline. Eventually the water will freeze, turning from a liquid to a solid. Nothing new needs to happen to generate this “phase transition”. All that is necessary is for the temperature in the freezer to remain below zero degrees Celsius.Now replace “temperature in the freezer” with “the level of interest rates”. The US economy is cooling in response to tight monetary policy, as evidenced by falling inflation and wage growth. It has not frozen over yet because it was running so hot two years ago. But if the economy’s temperature keeps falling, it will freeze over.In early 2022, there were two job openings for every unemployed worker. Anyone who lost their job back then could walk across the street and find new work. This prevented unemployment from rising.Things are not so simple any more. The job openings rate has dropped back down to pre-pandemic levels. Those who lose their jobs are finding it increasingly difficult to secure new ones. While an influx of people into the labour market has contributed to a rising unemployment rate over the past 12 months, close to half of the increase has been due to job loss.A softening labour market will undermine consumer spending. The personal savings rate stood at 2.9 per cent in July, less than half of what it was in 2019. Excess pandemic savings have been depleted. In inflation-adjusted terms, bank deposits for the bottom 20 per cent of income earners are below where they were in 2019. Consumer loan delinquency rates have risen to levels last seen in 2010, a year in which the unemployment rate was double what it is today. The housing market is showing renewed signs of stress. Homebuilder confidence dropped in August to the lowest level so far this year. Home sales are weak. Housing starts and permits have rolled over. The number of housing units under construction has declined by more than 8 per cent since the start of this year. Unlike in the past, construction employment has not fallen yet — perhaps builders are hoarding labour — but if housing construction continues to weaken, we will see a wave of lay-offs in that sector.Commercial real estate remains under duress. Office vacancy rates are at an all-time high and are still trending upwards. Default rates are climbing in the office, apartment, retail and hotel segments. Regional banks, which account for the bulk of CRE lending, will experience more losses.Manufacturing activity is slowing again. The new orders component of the ISM manufacturing index fell in August to the lowest level since May 2023. In real terms, core capital goods orders have been trending lower for the past two years. Construction spending has been subsidised by the stimulus provided by the Chips Act and the Inflation Reduction Act. While still high in absolute terms, this spending has peaked and will decrease over the coming quarters.The Federal Reserve is unlikely to save the day. The economy succumbed to recession just months after the central bank started lowering rates in January 2001 and September 2007.The market is currently expecting the Fed to cut rates by more than two percentage points over the next 12 months. Long-term bond yields will not fall much from current levels unless it delivers more easing than what the market is already discounting. That is unlikely unless there is a recession.Even if the Fed does deliver more easing than is currently priced in, the impact will only be felt with a lag. In fact, the average mortgage rate that homeowners pay will almost certainly rise next year as low-rate mortgage debt rolls off and is replaced by that with higher rates.In a recessionary scenario, we expect the S&P 500 forward price/earnings ratio to fall from 21 to 16 times and for earnings estimates to decline by 10 per cent from current levels. This would bring the S&P 500 down to 3800, representing a nearly one-third drop from current levels. In contrast, bonds could do well. We expect the 10-year Treasury yield to fall to 3 per cent in 2025. Investors were right to favour stocks over bonds for the past two years. Now, it is time to flip the script.  More

Here are a few key facts about Barnier:* 1951 – Born Jan. 9 in La Tronche, a suburb of the French Alpine city of Grenoble. * 1978 – Elected to parliament aged 27, representing the Gaullist, centre-right Savoie district.* 1992 – Co-organiser of Winter Olympics held at Albertville in his constituency, an event still central to his public image.* 1993-95 – Environment minister.* 1995-97 – France’s Europe minister. * 1999-2004 – EU regional policy commissioner, responsible for grants and subsidies accounting for a third of Union’s budget.* 2004-05 – Foreign minister.* 2007-09 – Agriculture minister.* 2009-10 – EU lawmaker.* 2010-14 – EU commissioner for internal market and services. Negotiated extensive new regulation of financial markets after the global crash, including reforms unpopular in the City of London.* 2016 – Named EU’s Brexit negotiator after Britain’s referendum on leaving the bloc.* 2021 – Failed in a bid to get his conservative party’s nomination for the 2022 presidential election. More

Gold ETFs, storing bullion for investors, are a major category of investment demand for the precious metal, which touched a record high of $2,531.60 per ounce on Aug. 20 amid bets on upcoming U.S. interest rate cuts.However, gold ETFs had three consecutive years of outflows amid high global interest rates, and the latest four months of inflows only managed to trim the year-to-date losses to a net outflow of 44 metric tons.Gold ETFs saw the inflow of 28.5 tons, or $2.1 billion, in August, bringing their collective holdings to 3,182 tons, the WGC, an industry body grouping global gold miners, said in a research note. A stronger gold price and recent inflows pushed the total assets under management to a month-end peak of $257.3 billion in August.The WGC estimates that global gold trading volumes fell in August by 3.2% month-on-month to $241 billion a day due to lower exchange-traded activity on COMEX, however average trading volumes in the opaque over-the-counter (OTC) market rose by 5.9% to $158 billion.With the gold price up 21% so far this year and rising expectations of the U.S. rate cuts, speculators increased their total net long position on COMEX by 17% from July to 917 tons by the end of August, the highest level since February 2020. More

$75 per monthComplete digital access to quality FT journalism with expert analysis from industry leaders. Pay a year upfront and save 20%.What’s included Global news & analysisExpert opinionFT App on Android & iOSFT Edit appFirstFT: the day’s biggest stories20+ curated newslettersFollow topics & set alerts with myFTFT Videos & Podcasts20 monthly gift articles to shareLex: FT’s flagship investment column15+ Premium newsletters by leading expertsFT Digital Edition: our digitised print edition More

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

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