Company announcements of layoffs in the United States surged in October as AI continued to disrupt the labor market.
Announced job cuts last month climbed by more than 153,000, according to a report by Challenger, Gray & Christmas released Thursday, up 175% from the same month a year earlier and the highest October increase since 2003. Layoff announcements surpassed more than a million in first 10 months of this year, an increase of 65% compared to the same period last year.
“This is the highest total for October in over 20 years, and the highest total for a single month in the fourth quarter since 2008. Like in 2003, a disruptive technology is modifying the landscape,” the report declared.
The outplacement and executive coaching firm declared America’s labor market continued to normalize after a pandemic-era boom, but also cited “AI adoption, softening consumer and corporate spconcludeing, and rising costs” as key factors putting companies under pressure.
Indeed, major companies such as Amazon and Tarobtain have announced major layoffs in recent months, with several of them citing AI. However, announcements of layoffs don’t immediately translate to higher unemployment.
It’s also been complicated to assess the labor market’s health becautilize of the government shutdown, which has now become the longest on record: Official economic statistics have been suspconcludeed since the launchning of October, including the Labor Department’s closely watched employment report, which includes the unemployment rate and monthly payroll growth numbers.
The September jobs report, which was scheduled for October 3, hasn’t been released and there will not be an October jobs report this month; it was originally scheduled for Friday. That has created it difficult for economic policybuildrs, such as Federal Reserve officials, to build important decisions.
Investors and policybuildrs now see to alternative data, such as Wednesday’s private-sector payroll data from ADP, along with the Challenger report, to understand the state of the US economy.
But, as Fed Chair Jerome Powell declared in a news conference last month, private data cannot replace government figures, which are widely known as the “gold standard” of measuring the world’s largest economy. And the persistent absence of those figures could derail monetary policybuilding and put future rate cuts at risk.
“There’s a possibility that it would build sense to be more cautious,” Powell declared.
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