Layoff notices surged in October across much of U.S., Federal Reserve report says

Impending layoff notices across much of the U.S. surged in October, highlighting signs of stress in the job market.

Data from the Federal Reserve Bank of Cleveland shows that 39,006 Americans last month in 21 states received a Worker Adjustment and Retraining Notification Act, or WARN, notice informing them of an upcoming layoff. U.S. labor law requires employers to provide these written warnings 60 days ahead of plant closings or mass layoffs.

It represents one of the highest numbers of WARN notices since Federal Reserve Bank of Cleveland researchers started tracking the data in January 2006, although the tally remains below the spikes recorded during the 2008 financial crisis and the 2020 pandemic. 

Layoff notices across the 21 states tracked by the Cleveland Fed reached a peak of more than 550,000 in March 2020. 

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Major companies including Target, Amazon and UPS have announced rounds of job cuts in recent weeks, with some economists noting that the labor market appears to be weakening. The record-long government shutdown has also delayed two months’ worth of federal jobs data, creating a blind spot in assessing U.S. employment conditions.

Despite the lack of official government data, some other measures point to a cooling U.S. labor market. For example, outplacement firm Challenger, Gray & Christmas recently said that layoffs last month soared to their highest October level in 22 years, while ADP data released Tuesday shows U.S. companies shed an average of 2,500 jobs per week in the four weeks ending Nov. 1.

Some experts warn that the latest layoffs may be only an early sign of broader cutbacks yet to come. Pantheon Macroeconomics economists Samuel Tombs and Oliver Allen said in a Monday email that they expect layoffs to pick up next year amid wider AI adoption, while noting that the technology has had a “net positive impact” on the labor market so far this year.

The delayed September employment report, which will be released Thursday, will provide another barometer on the health of the U.S. labor market. Economists polled by financial data provider FactSet predict payroll gains of 50,000.