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Nearly half of 2.3M job cuts in 2020 were due to COVID-19: RPT

Andrew Challenger, Challenger, Gray & Christmas Vice President, joins Yahoo Finance's Kristin Myers to break down the latest on the unemployment front, as another 787K Americans file new jobless claims.

Video Transcript

[MUSIC PLAYING]

- Welcome back to Yahoo Finance Live. Let's look at those jobless claim numbers. Now, they did come in lower than expected. 787,000 people filing for unemployment, while economists were anticipating that number to be 800,000. So some good signs there in the labor market. I want to bring on Andrew Challenger, vice president of Challenger, Gray, and Christmas Now. Andrew great to have you back with us.

Starting with those jobless claims that we're seeing, it seems as if the labor market is doing better than expected. But the virus is still surging. I know that there was impacts of that in December, which I'll get into in just a moment with you. I'm wondering how you're seeing these numbers right now?

ANDREW CHALLENGER: Yeah, despite the fact that it did beat projections, it's still a severely elevated level of new unemployment claims, seeing well above 700,000 people filing for unemployment for the first time. Those are numbers we never saw outside of the pandemic. So I think it does signal that despite the fact that there are some positive signals for the labor market in terms of some uncertainty, in terms of political uncertainty, and uncertainty around the virus have started to clear away, there is still ongoing destruction in the labor market occurring every week in a handful of sectors.

- So on that point, because Challenger, Gray, and Christmas released a report that planned job cuts actually increase last month, the month of December, that it was a jump of nearly 20%, I believe-- a little bit over 18% from the cuts that we had seen in November, which doesn't really seem to bode well for the recovery right now. We just saw that chart of the jobless claims. 787, a slight tick downward from 790 from the week before. So it seems at least that trend line is going where we want it.

But to hear a number like that, that these cuts jumped 20% from the month before, only makes me worry about what's happening, or what will happen in January, or in February, especially as we've had doctor after doctor after doctor tell us even just on this program alone, that those months are going to be the worst for this pandemic.

ANDREW CHALLENGER: Yeah, right. There's no doubt that there's still jobs recovery looming once the coronavirus starts to get under control in certain sectors of the economy that have been effectively shuttered can start to open up, like entertainment and leisure, in retail, in hospitality and travel. Once it's safe to go back and participate in those businesses, there will be another jobs boom. But until then, there are companies that are fighting each and every day to try to make it to the other side of the virus. And there's some that aren't making it.

So we continue to see job cuts. Over the last month, we saw a really high concentration of job cuts within the transportation sector. So the kind of private and government transportation. A lot of rail lines were making cuts. Those companies that may have hoped to survive to the other side are just saying, we're not going to make it. We don't see a return in jobs coming soon enough for us to have to make these cuts now. So unfortunately, I think we still do have a handful of months where more destruction in the jobs market is going to occur.