WARN Act Layoffs vs Consumer Sentiment
Monthly employees affected by mass layoffs compared with the University of Michigan Consumer Sentiment Index, 1996–present
Consumer sentiment and mass layoffs show a strong inverse relationship. Every major layoff wave since 1988 has coincided with a sharp decline in the sentiment index. During the 2008–09 recession, sentiment fell 48% from its pre-crisis level while WARN layoffs surged to record highs. The index hit an all-time low of 50.0 in June 2022 amid inflation fears and Fed tightening — even below its COVID trough of 71.8. The current reading of 52.9 sits 40% below the 1988–2019 average of 87.9, suggesting consumers remain deeply pessimistic even as the labor market sends mixed signals.
Source: WARN Act filings (48 states + DC) • University of Michigan (UMCSENT, via FRED)
Peak Layoff Months
The five months with the highest number of employees affected by WARN Act filings:
| Month | Employees Affected | Notices Filed |
|---|---|---|
| March 2020 | 538,278 | 4,205 |
| April 2020 | 145,869 | 1,226 |
| September 2020 | 80,247 | 319 |
| October 2020 | 71,235 | 326 |
| May 2020 | 56,040 | 431 |
About This Data
WARN Act Layoff Data
The Worker Adjustment and Retraining Notification (WARN) Act requires employers with 100+ employees to provide 60-day advance notice of mass layoffs (50+ workers) and plant closures. LayoffAlert aggregates WARN filings from 48 US states and DC. Data from 2023 onward is collected via daily automated scraping of state government sources. Historical data (pre-2023) is sourced from a comprehensive CSV database of WARN filings.
Consumer Sentiment Index
The University of Michigan Consumer Sentiment Index (UMCSENT) is a monthly survey-based measure of consumer confidence in the US economy. It surveys approximately 500 households on their personal finances, business conditions, and buying outlook. The index is benchmarked to 1966 = 100, with readings above 100 indicating above-average optimism and below 100 indicating pessimism. It is considered a leading economic indicator — falling sentiment often precedes recessions and layoff waves. Data is sourced from the FRED database, series UMCSENT.
Limitations
- WARN Act filings undercount total layoffs — the Act only covers employers with 100+ workers and layoffs affecting 50+ employees.
- Consumer sentiment is survey-based and can be influenced by political sentiment, media coverage, and gas prices, not just labor market conditions.
- The relationship is correlational, not necessarily causal — both sentiment and layoffs may be driven by broader economic forces.
- The index hit historic lows in 2022 driven largely by inflation concerns, while WARN layoffs remained relatively moderate, illustrating that the relationship is not always direct.