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Recent Layoffs in a Fragile Labor Market BY ROB VALLETTA AND KATHERINE KUANG

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Abstract

Rising layoff rates during the spring of 2011 highlight renewed labor market weakness. Although job cuts among state and local governments have accelerated over the past few years, most of the recent increase occurred among private-sector employers. Following modest improvement in early summer, subsequent labor market performance has been uneven, indicating that labor market conditions remain fragile. The broad measures of economic activity identifying business cycles indicate that the recent recession ended in June 2009. But labor market conditions remained quite weak well into 2010. In late 2010 and early 2011, declines in the overall unemployment rate and in broader measures of labor underutilization suggested that the U.S. labor market was strengthening. Between November 2010 and March 2011, the pace of private-sector job growth picked up significantly and the unemployment rate fell by 1 percentage point to 8.8 % after hovering near 10 % since late 2009. More recent data have shown troubling signs of renewed weaknesses in the labor market. In particular, the rate of layoffs, defined broadly as all forms of involuntary job loss, has increased. In this Economic Letter, we quantify recent increases in layoffs and examine their implications for the labor market going forward. Despite ongoing employment reductions among state and local governments, most of the recen

Year: 2011
OAI identifier: oai:CiteSeerX.psu:10.1.1.352.6501
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