November job losses are increasing, highlighting key weaknesses in the sector
The Challenger, Gray & Christmas report shows that U.S. employers announced 57,727 job cuts in November, up 3.8% month-over-month and a steep 27% increase from the same period last year. Job losses since the start of the year reached 722,566, the highest level since 2009 (excluding 2020 pandemic-related layoffs).
The auto sector reported 11,506 layoffs in November due to supply chain disruptions, tariff concerns and increased competition from foreign EV manufacturers. Year-to-date, automotive job losses are up 59% compared to last year. Similarly, industrial production saw a notable increase in layoffs of 158% through November, indicating tension in the broader industrial base.
On the plus side, layoffs at tech companies showed signs of stabilizing, with a 2% year-on-year decline in the numbers since the start of the year. The healthcare sector also recorded an 18% decline in redundancies over the same period, reflecting the relative resilience in these sectors.
Forecast: Cautious bearishness ahead
Labor market statistics point to increasing pressure, with layoffs increasing in key sectors and unemployment rates starting to rise. This points to a gradual weakening of economic conditions, especially if job losses persist or hiring plans remain subdued. While the overall insured unemployment rate remains low, traders should brace for a cautious bearish outlook in the near term, especially for sectors like automotive and industrial manufacturing. Expect higher volatility in related stocks and possible policy adjustments from the Fed as broader job losses weigh on consumer spending.