These statistics on layoffs help us gauge the strength of the job market. Fewer layoffs suggests more people have jobs. Every job comes with an income,
which gives a household spending power. Spending greases the wheels of the economy and keeps it growing, so a stronger job market creates a
healthier economy.
There's a downside to it, though. When few people are looking for jobs, businesses can have a tough time finding new workers. They might have to pay
overtime to current staff, use higher wages to lure people from other jobs, and in general spend more on labor costs because of a shortage of workers.
This leads to wage inflation, which is bad news for the stock and bond markets. Federal Reserve officials are always on the lookout for the prospect of
inflationary pressures.
The Challenger report breaks down the layoffs into industries, which provides insight to trends that likely will affect stock prices in specific industries. Note
that not all announced layoffs culminate in actual layoffs.