November 6, 2025

QuickTakes

Challenging The Challenger Report

Bond prices rallied and stock prices fell this morning on news that layoffs rose sharply, according to the Challenger Report, which was titled "JOB CUTS SURPASS 1 MILLION; HIGHEST OCTOBER TOTAL SINCE 2003. COMPANIES CITE COST-CUTTING, AI IN OCTOBER."

That headline is somewhat sensational. It refers to the past 12 months through October. The actual number of layoffs during the month was 153,074, as the report notes in its first sentence (chart). So far, October's jump hasn't been confirmed by initial unemployment claims. The official data are available only through September 19 because of the government shutdown. But Bloomberg News estimates that jobless claims decreased to about 218,000 in the week ended October 25 from a revised 231,000 in the prior week. Those are low readings.

Most of October's announced layoffs occurred in the warehouse and technology industries (chart). Automation and robotics are boosting productivity in warehousing. AI is doing the same in technology.

Announced technology layoffs have been high over the past two years (chart). The industry might have hired too many workers in 2022 and 2023. 

There was a big jump in October's warehouse-related announced layoffs (chart). That's odd since the holiday season should keep warehouses very busy. Again, this spike is probably primarily attributable to productivity gains, especially in online retailers’ inventory management.

Meanwhile, announced hiring plans also spiked higher in October, according to seasonally adjusted data (chart).

Yesterday, the Federal Reserve Bank of New York released its quarterly report on consumer debt. The good news is that delinquencies remain very low for mortgage and HELOC debt (chart). However, delinquencies on credit card, student loan, and auto loan debt are signaling financial stress. That's mostly among low-income debtors. They may be forced to cut back on discretionary spending. However, we believe that Baby Boomers, who are retiring with a record net worth of $80 trillion, will continue to boost overall consumer spending.

By the way, it’s also good news that the percentage of senior loan officers tightening lending standards remains low (chart).

QuickTakes Archive

Contact us by email or call 480-664-1333.

Copyright (c) Yardeni Research, Inc. Please read complete copyright and hedge clause.