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Fewer Mass Layoffs: How Good Is This News?

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In this difficult economy, the smallest bit of optimism can become a headline. Like this one: The number of businesses conducting mass layoffs—in which 50 or more workers are let go—dropped to the lowest level in 11 months, according to the Denver Business Journal, which reports five mass layoffs in Colorado in August, down from 15 in July. This news comes as the unemployment rate appears to be leveling off at around 7.3 percent. State “employment seems to be stabilizing,” says Donald Mares, the state labor department’s executive director. Meanwhile, the issues that led to all this economic uncertainty are still unraveling. For instance, while Greeley’s now-closed New Frontier bank mounted loan losses, it took almost two years for state and federal regulators to react, writes Bloomberg News, “a delay that may have made the closing more costly.” But Colorado’s recovery isn’t assured. Weak energy, banking, and commercial real estate prospects may hold the state back, says economist Mark Snead, the branch executive in Denver for the Federal Reserve Bank of Kansas City (via the Grand Junction Sentinel).

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