US DATA: Challenger Job Trends This Year Are Higher-Firing, Lower-Hiring

Challenger, Gray & Christmas reports job cut announcements fell 25.8% Y/Y in September, less severe than consensus which had expected a 13.3% rise. But the broader report was suggestive of a labor market at its most low-hiring and high-firing for a first 9 months of the year since the pandemic and before that, the Global Financial Crisis, with hiring in September itself looking unusually weak ahead of the key holiday season for retailers. 

• It should first be acknowledged that public sector-related employment is the main driver of overall weakness: the government sector has announced 299,755 job cuts this year, all but about 10k of which were DOGE-impacted. (Similarly, the regional job cuts breakdown was heavily weighted to the East, the lion's share being reductions at federal agencies in Washington DC with cuts rising 759% to 298,901 from 34,788). A distant second sector-wise is Tech which has shed 107,878 jobs so far this year.
• Likewise, employers' reasoning for layoffs is DOGE-related: that is cited in 293,753 planned layoffs YTD. That's also seen an additional 20,976 cuts "attributed to DOGE Downstream Impact, such as the loss of funding to private non-profits and affiliated organizations."
• However, market/economic conditions were also cited for 208,227 cuts YTD, which "reflects employers’ continued response to economic uncertainty, inflation, tariffs, and shifting demand across sectors."
• And while the headline figures are exaggerated by DOGE effects, the non-government job market as reported by Challenger appears as weak as it has in the last 15 years (ex-pandemic).
• Ex-government job cuts were down 32% Y/Y on the month, but looking at the year-to-date, they totaled 646,671: this is up from 571,503 in 2024 and the most since 2020; before that the biggest 9-month cumulative ex-gov't job cut total was 2009 (981,306).
• And against this backdrop, hiring plans remain very soft: through September YTD the 204,939 hiring intentions are down 58% Y/Y for the lowest since 2009 at the depths of the Global Financial Crisis. For September itself, hiring plans were a post-2011 low 117,313 (as usual this was made up largely of retailers ahead of the holiday season, which totaled 96,450 - but this was well below the 403,893k prior).
• It's possible that a strong final quarter of the year, starting with seasonal hiring in October, boosts the underlying data enough to make it not as comparable to historical recession years, but so far it doesn't appear that way.
• “It’s very likely job cut plans are going to surpass a million for the first time since 2020 and for the ninth time in our series. Previous periods with this many job cuts occurred either during recessions or, as was the case in 2005 and 2006, during the first wave of automations that cost jobs in manufacturing and technology,” as the report quoted Andy Challenger, "Senior Vice President and labor expert for Challenger, Gray & Christmas."  That refers to the 946,426 layoff intentions YTD vs 609,242 in 2024, which while exaggerated by government effects, also shows a weaker underlying private sector labor market.