Challenger Job-Cuts Report

Comprised of a composite of weekly jobs reports from state departments of labor, many financial analysts turn to the monthly Challenger Job-Cuts Report to take the pulse of the jobs’ market.

Produced by Challenger, Grey & Christmas, headquartered in Chicago, IL, the indicator also breaks down the layoffs by region and industry. Data from the previous month is published by the firm the following month. So, June’s numbers would be released in July.

Analysts do, however, urge that users approach the Challenger Job-Cuts Report with caution because it doesn’t distinguish between scheduled short- and long-term layoffs, or cuts resulting from normal attrition or actual pink slips.

Additionally, it doesn’t account for jobs that have been eliminated over a long period of time, nor are the figures adjusted for seasonal differences. One example would be when retailers beef up floor salespeople around holiday time, then lay them off months later.

Although minor in nature, the lack of these details can skew the report. If the number of reported corporate layoffs is lower than excepted, it generally means a stronger dollar, while a higher than expected figure suggests a weaker currency. However, if an advisor is planning on making investment recommendations on the reports, it would be wise to take these discrepancies into account.

Some of the firm’s top competitors include: Lee-Hecht Harrison, Rise Smart, Right Management, Career Partners International, BPI, Keystone Partners, Penna, Partners in Human Resources and Profiles International and DDI.

It is important to note that although the Challenger Job-Cuts Report could be used as a leading indicator for new jobless claims, not all layoff announcements result in job losses in the near term. Some companies will announce layoffs that will take place further into the future. In a situation such as this, people may quit voluntarily or the company's situation may change in order to keep their employees. The report is broken down by industry, which is valuable to provide insight into these trends that will likely affect prices of stocks in each of the industries.