Saturday, February 02, 2008

Recessions and mass layoffs

Whenever a recession approaches, mass layoffs increase by a lot in the economy. I found following data on the bureau of labor department’s website regarding mass layoff events. The table below lists the number of mass layoff events since the year 1996 as reported by BLS. As you can see from the table that even in the economic growth years mass layoff events range around 15k to 16k a year. In a recession, one we had in 2001, the mass layoff events spiked to around 21k. The years after a recession also saw a higher number of layoff events. The year 2002 had about 20k mass layoffs and year 2003 had almost 19k mass layoffs in the economy.

With today’s job numbers showing, 17,000 job losses for the month of January 2008, we should keep any eye on the mass layoff numbers from the BLS. A spike in mass layoffs, if it occurs, may be a sign of a recession.

Year Mass Layoff Events
1996 14,111
1997 14,960
1998 15,904
1999 14,909
2000 15,738
2001 21,467
2002 20,277
2003 18,963
2004 15,980
2005 16,466
2006 13,998
2007 15,493


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