November Mass Layoffs Bombshell
As it always does this time of month, the BLS released its Mass Layoffs Report today.
It is generally pretty boring. This month is no exception. If you casually glance at it you will not see anything unusual reported. That could not be further from the truth.
What the BLS fails to clearly report, which is very important, is how mass layoffs for November compare with the rest of 2012. That is found in Table 1. It is referenced at the bottom of the report. Two stats of interest from Table 1 are highlighted in red above.
For November, the BLS dryly reports there were 1,759 mass layoff “events” reported that involved 173,558 individual employees getting pink slips.
A mass layoff “event” is 50 or more employees being terminated by one employer for one reason or another in one month. It doesn’t matter what that reason is.
There was a substantial jump in both mass layoffs and total employees affected from October to November. Why?
As anyone can also see, November has – by far – the largest number of of mass layoffs and most employees affected of any month in 2012. Why?
You have to go all the way back to October of 2009 to find that many layoffs in one month!!
Why Have Mass Layoffs Jumped?
Didn’t the unemployment rate drop in November? Yup, it dropped from 7.9% in October to 7.7% in November.
How can that be with 173,500 mass layoffs? That is where the nearly 350,000 or so American workers who dropped out of the labor force last month mask the true employment picture.
Another thing, the Bureau of Economic Analysis reported just yesterday that Q3 GDP jumped by 3.1%. That is good news indicating an improving economy.
So what happened? Why such a substantial mass layoffs jump now?
Only one logical explanation comes to mind – THE FISCAL CLIFF!!!
Large employers are starting to respond to the uncertainty in the American economy brought on by government’s apparent inability to deal with the fiscal cliff. They are preparing for the worst.
Perhaps there is another, better explanation for the huge jump in November’s mass layoffs other than the fiscal cliff.
However, the CBO and Fed Chairman Ben Bernanke and just about everyone else have long predicted a recession early next year if the fiscal cliff is not averted. Businesses, especially large ones, have to be pragmatic. They have to look at government’s track record and respond accordingly when it comes to their bottom line.
The economic impact of the fiscal cliff is beginning to raise its ugly head and it hasn’t even arrived yet.
If November’s mass layoff figures are a harbinger of things to come then unlucky 2013 is gonna be a rough year.