3rd quarter mass layoffs lowest ever recorded for quarter

November 18, 2004

In the third quarter of 2004, 780 mass layoff actions were taken by employers that resulted in the separation of 131,452 workers from their jobs for at least 31 days, according to preliminary figures released by the U.S. Department of Labor's Bureau of Labor Statistics. Both the total number of layoff events and the number of separations were sharply lower than in July-September 2003, and were the lowest for a third quarter since the program began in 1995.

The declines over the year were most notable in administrative and support services, food manufacturing, and textile mills. Extended mass layoffs that involve the movement of work within the same company or to a different company, domestically or outside the U.S., occurred in about 13 percent of the nonseasonal layoff events and accounted for about 15 percent of the worker separations in nonseasonal events.

In the third quarter of 2004, the national unemployment rate was 5.4 percent; a year earlier, it was 6.0 percent. Private nonfarm payroll employment increased by 1.5 percent, 1,679,000, from July-September 2003 to July-September 2004.

Manufacturing industries accounted for 34 percent of private nonfarm layoff events and 32 percent of separations during July-September 2004. The 41,982 worker separations in manufacturing were the fewest for manufacturing for any quarter since 1995. Layoff activity in this sector was concentrated in food manufacturing (7,704), followed by transportation equipment manufacturing (7,526), and fabricated metal products (3,406).

Forty-three percent of employers reporting an extended layoff indicated they anticipated some type of recall. This compares with 32 percent of employers anticipating a recall a year earlier. Among those businesses expecting a recall, most expected to recall over one-half of the separated employees within six months. Forty-seven percent expected to extend the offer to all laid-off workers, the highest proportion for a third quarter since 2000.

The number of separations due to extended mass layoff events was highest in the Midwest (46,371), followed by the South (32,912), the West (26,910), and the Northeast (25,259). Layoffs in the Midwest were mainly in transportation equipment manufacturing, administrative and support services, and food and beverage stores.

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