Layoff announcements surged last month: The worst October in 22 years

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 changing the landscape,” the report said. The outplacement and executive coaching firm said America’s labor market continued to normalize after a pandemic-era boom, but also cited “AI adoption, softening consumer and corporate spending, and rising costs” as key factors putting companies under pressure. Indeed, major companies such as Amazon and Targethave announced major layoffsin recent months, with several of them citing AI. However, announcements of layoffs don’t immediately translate to higher unemployment. The government shutdown is now the longest - and likely the most damaging in US history It’s also been complicated to assess the labor market’s health because of the government shutdown, which has now become the longest on record: Official economic statistics have been suspended since the beginning 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 made it difficult for economic policymakers, such as Federal Reserve officials, to make important decisions. Investors and policymakers now look to alternative data, such as Wednesday’s private-sectorpayroll data from ADP, along with the Challenger report, to understand the state of the US economy. But, as Fed Chair Jerome Powell said 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 policymaking and put future rate cuts at risk. “There’s a possibility that it would make sense to be more cautious,” Powell said.