US-China Trade War Led To 10,000 Layoffs In August 2019

The US-China trade war is being cited by employers as one of the major reasons for their firing many of the 53,480 American employees let go in August.

Job losses have been quietly on the rise in the United States this year, a fact often overlooked by news about the strong economy and the headline-grabbing politics of the trade war.

The August layoff figure is 37.7 percent higher than July’s total of 38,845, according to the latest report on job cuts from Challenger, Gray & Christmas, Inc., a global outplacement and career transitioning firm based in Chicago. This firm is also the oldest executive outplacement firm in the U.S.

The Challenger report said August’s total is the fourth highest for layoffs so far this year. It's also the eighth straight time job cuts were larger than the comparative month from the preceding year. The August total was the highest August total since 2009 when 76,456 cuts were made.

The August total is also 39 percent higher than the 38,472 cuts in August 2018.

“Employers are beginning to feel the effects of the trade war and imposed tariffs by the U.S. and China. In fact, trade difficulties were cited as the reason for over 10,000 job cuts in August," said Andrew Challenger, Vice President of Challenger, Gray & Christmas, Inc.

"We are continuing to see investor concerns shaking confidence in the market, and employers appear to be cutting workers in response to a slowdown in demand for their products and services."

Challenger noted a number of industries are experiencing job cut announcements well above that of 2018. The industries include retail, housing, energy, manufacturing, and automotive. Job losses also tend to be concentrated in industry sectors grappling with some sort of legislation, tariff or regulation.

So far this year, employers have announced plans to slash 423,312 jobs. This total will be 36.2 percent higher compared to the 310,773 cuts in the first eight months of 2018. It’s also the highest eight-month total since 2015 when 434,554 cuts were announced.

Technology was the hardest hit by the job losses in August. It saw the firing of 15,355 people, including 488 from Cisco Systems Inc.

U.S. tech firms have now announced 341.2 percent more cuts this year over 2018. The federal and state governments announced 5,785 cuts in August, bringing the year-to-date total to 11,885. Healthcare companies announced 5,040 job losses in August.

Retail continues to lead all sectors in job firings until August with 57,226 cuts. Of this total, 2,059 took place in August. If it's any consolation, this number is 28 percent fewer than the 79,478 announced in the same period in 2018.

The problem-plagued automotive sector announced 36,148 cuts so far this year. This total is the highest eight-month total since 2009 when 128,906 employees were fired.

The industrial goods manufacturing sector fired 3,822 people. This sector has announced 202.6 percent more job cuts so far this year compared to the same period in 2018. Transportation companies announced 3,554 job cuts while food companies declared 3,010.

The Challenger report said several industries have announced more than double the job cuts through the same period in 2018.

Warehousing companies are cutting jobs due to losing contracts with major retailers and e-tailers, or due to competition. Coal and other mining companies continue to experience downturns and are still letting go of people.

The shaky real estate and construction sectors are taking hits from the soft housing market and are also firing more people.