WARN Act Layoffs vs Federal Funds Rate
Monthly employees affected by mass layoffs compared with the Federal Reserve's benchmark interest rate, 1996–present
Since 1997, every major Fed rate hike cycle has been followed by a significant increase in mass layoffs. Across the three completed tightening cycles (1999–2000, 2004–2006, and 2022–2023), WARN Act layoff filings roughly doubled within 12 to 18 months of the federal funds rate reaching its peak. The most recent cycle saw layoffs increase by over 240% in the year after the Fed held rates at 5.33%.
Source: WARN Act filings (48 states + DC) • Federal Reserve (FRED FEDFUNDS)
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.
Federal Funds Rate
The federal funds rate is the interest rate at which banks lend reserve balances to other banks overnight. It is the Federal Reserve's primary tool for monetary policy. When the Fed raises rates to combat inflation, borrowing becomes more expensive, which can slow economic growth and lead to layoffs. When the Fed cuts rates, it aims to stimulate economic activity. Data is sourced from the Federal Reserve Economic Data (FRED) database, series FEDFUNDS.
Limitations
- WARN Act filings undercount total layoffs — the Act only covers employers with 100+ workers and layoffs affecting 50+ employees.
- Filing compliance varies by state, and some states have more complete historical records than others.
- The relationship between interest rates and layoffs involves significant time lags and is influenced by many other factors.
- Rate changes affect different industries at different speeds — interest-rate-sensitive sectors (housing, auto, tech) respond faster than others.