Layoff pace in December hit lowest level since mid-2024, Challenger says

• December layoffs dropped 50% month-over-month to 35,553, an 8% decrease from December 2023, representing a 17-month low
• Full-year 2024 job cuts totaled over 1.2 million, the highest since the pandemic year of 2020 and marking the worst fourth quarter since 2008
• Companies announced plans to hire 10,496 workers in December, up 16% from November and 31% year-over-year, indicating improved hiring intentions

Summary: U.S. Layoffs Drop to 17-Month Low in December

Planned job cuts in the U.S. fell sharply in December 2024, totaling 35,553 positions—a 50% decline from November and 8% below December 2023 levels, according to Challenger, Gray & Christmas. This marked the lowest monthly figure since July 2024, suggesting potential stabilization in the labor market.

Despite the positive December data, full-year 2024 figures reveal significant workforce pressures. Employers announced over 1.2 million job cuts throughout the year, representing a 58% increase from 2023 and the highest annual total since the pandemic year of 2020. The fourth quarter of 2024 was the worst since 2008.

Offsetting the layoff trend, companies announced hiring plans for 10,496 workers in December, up 16% from November and 31% year-over-year. Andy Challenger, the firm's chief revenue officer, characterized the decline in layoffs combined with increased hiring plans as "a positive sign after a year of high job cutting plans."

Market Implications:

The disconnect between Challenger's layoff data and government statistics remains notable. Weekly jobless claims have remained relatively stable throughout 2024, though monthly payroll growth has been weak, averaging just 55,000. The December jobs report, expected Friday, forecasts 73,000 new payrolls according to Dow Jones consensus.

The data suggests a potentially stabilizing labor market heading into 2025, though the elevated full-year layoff figures indicate lingering economic pressures. Investors should monitor Friday's official employment report for confirmation of this trend and insights into broader economic health.