Some cracks starting to appear in US jobs market, says Challenger

According to Challenger, Gray and Christmas, US based firms announced 29,989 job cuts last month, for a 46.4% increase on August.

"Some cracks are beginning to appear in the labor market. Hiring is slowing and downsizing events are beginning to occur," said Andrew Challenger, senior vice president of Challenger, Gray & Christmas, Inc.."

For the whole of the third quarter, job cut announcements fell by 1.6% versus the three months to June to reach 76,284, but were up by 45.1% against the same three-month stretch of 2021.

The year-to-date total of 209,485 on the other hand declined by 21% versus the first nine months of 2021, for the second-lowest January-September reading since 1993.

Retail and Technology firms paced job cut announcements in September while for the year to September, it was the Fintech sector that announced the most layoffs, to the tune of 5,780, for a surge of 927%.

Automotive firms meanwhile announced 28,992 cuts over the year to September, for a near tripling in announcements.

Job cut announcements in Finance, where companies were dealing with a possible recession and downturn in housing, had increased by 81% to 14,832 for the year-to-date.

“The cooling housing market and Fed’s rate hikes are leading to job cuts among mortgage staff at banks and lenders," said Challenger.

"The recession concerns are leading to increased uncertainty, and companies across sectors are beginning to reassess staffing needs.”

In total, employers announced plans to hire 380,014 workers in September, the smallest tally for that month since 2011.

"Typically, Retail and Transportation/Warehousing are ramping up hiring for the holiday season and announcing their plans in September.

"This low figure suggests companies that typically staff seasonal hires are waiting to see whether consumers will show up for the holiday season."