US layoffs surged in August: report

LAYOFF announcements from US employers shot up in August on the back of trucking company Yellow Corp’s filing for bankruptcy, adding to recent evidence that the labour market is cooling.

US-based employers announced 75,151 job cuts in August, according to a report released on Thursday (Aug 31) by employment firm Challenger, Gray & Christmas. This represented a 217 per cent surge from July’s levels, which were the lowest in nearly a year.

A significant portion of the announced layoffs arose from the approximately 30,000 workers reported to have lost their jobs after Yellow, one of the country’s largest trucking companies, filed for bankruptcy in August. At the same time, economists have noted that the anticipated layoffs at Yellow have not yet had any measurable impact on new claims for unemployment benefits.

For over a year, the labour market remained resilient in the face of the Federal Reserve’s 525 basis points of interest rate hikes since March 2022, and in July, the number of layoffs decreased annually for the first time in over a year. But other data released this week revealed long-expected signs of softening, as private payrolls growth slowed and job openings slipped in July.

Andrew Challenger, senior vice-president of Challenger, Gray & Christmas, said: “Job openings are falling, and American workers are more reluctant to leave their positions right now. The job market is resetting after the pandemic and post-pandemic hiring frenzy.” REUTERS