Job cut announcements soared 193% in August after a few months of steady declines, according to the latest report from Challenger, Gray & Christmas. Senior vice president of Challenger, Gray & Christmas, Inc. Andrew Challenger joins Wealth! to discuss the state of the labor market and what it means for the Federal Reserve’s rate cut path ahead.
Challenger notes that the job cut announcements in August were largely seen in the tech sector, which has been cutting jobs at a higher rate than other industries. The education, government, healthcare, leisure, and entertainment sectors saw a return in job cuts, which he calls "concerning" since these areas have been largely resilient.
Manufacturing jobs cuts jumped more than 200% from 2023, which Challenger also finds worrying. "Manufacturing, in particular, is an area that had been resilient for a really strong period of time the last few years. But the fact that we’re seeing some losses, there is a sign that we might be really approaching that tipping point where the Fed trying to balance their fight of inflation against rising unemployment, is really going to be looking at closely for their next decision," he explains.
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