Mass Layoffs Decline Slightly in July

Fewer firms fired 50 or more employees in July, according to the Bureau of Labor Statistics. Last month 2.3% fewer firms engaged in mass layoffs, while 1.3% fewer workers were let go through such actions. Even though these declines are slight, this is sort of a relief, as the numbers rose in June. The current levels still aren't very reassuring, however.

First, here's a chart showing the number of workers who lost their jobs through mass layoffs since 2004:

mass layoff claimants 2010-07 v2.png

You can see that the red line (monthly workers who were let go through mass layoffs) got a little closer to the green one (the 2004-2007 average). But it isn't there quite yet. This indicates that firms are still laying off more workers through mass layoffs than usual.

The number of actions concurs with this trend:

mass layoff actions 2010-07 v2.png

Again, the red line is nearing the green one, but firms are still conducting more mass layoff actions than what was normal prior to the recession. Neither measure shows fewer mass layoffs than in May.

This data indicates that the businesses are still trying to aggressively cut costs through layoffs, but given what we already know of the labor market's struggles this isn't surprising. These mass actions must decline further for a strong jobs recovery to take hold. Even as some firms begin to hire, as long as lots of others are still firing workers in large numbers, it will be hard to achieve much net job growth.