US Layoffs and Recruitment Freezes Are Just the Tip of Slowdown in the Labor Market

    Bloomberg News reports that the labor market in the United States is stronger today than many thought would be possible. However, cracks are showing up, implying that this will not sustain.




    More Into It

    In the last few weeks, companies have announced tens of thousands of job cuts and plan to halt recruitment. The bulk of it has come from real estate, cryptocurrency, and technology firms that have laid off as many as 37,000 workers since May, according to TrueUp, a tech-job listing website. Brokerages and banks, including JPMorgan Chase & Co., are narrowing the headcount as the housing market is cooling off.

    The combination of slow consumer demand, 40-year high inflation, and hike in interest rates by the Federal Reserve is also making inroads into the other sectors. The second-largest producer of aluminum, Century Aluminum Co., stated that it has plans to lay off 600 workers.

    There is economic data that suggests that more are yet to come. Over time manufacturing hours have dropped for three straight months, which is perhaps the longest downward streak since 2015. The jobless claims related to the four-week average, less volatile than the weekly figures, surged to the highest level since January as more and more people filed for the benefits. There is a cooling of growth of wages across the country.



    The table below indicates the job cuts from the different companies in June 2022.

    job cuts
    Source: Company Releases

    The hike in interest rate by the Fed is programmed to slow down demand. This applies to demand workers as well. According to a forecast by the central bank, the unemployment rate can increase to 4.1% by 2024. This figure appears to be optimistic in comparison to the Wall Street estimates. Nomura Holdings Inc, for instance, sees the rate swelling to 5.9% by the end of 2024. And that could be a level of June 2021.

    At present, for now, the labor market continues to remain tight. The jobless rate at 3.6% in May is low historically, and there was a healthy rise in the payrolls by 39,000 the same month. When inflation is excluded, wage growth is high historically. While the new job postings have dropped in recent weeks, they remain 54% higher than before the pandemic, as per the job website data from Indeed. However, the traditional indicators are still lagging.



    RELATED ARTICLES

    Business Cards

    Unlocking the Power of Business Cards: Networking Essentials for Success

      Table of Contents Introduction The Evolution of Business Cards Why Business Cards Still Matter Designing...
    Lab-Grown Diamonds

    The Science Behind Lab-Grown Diamonds: How They’re Made and Why They Shine Bright

    Introduction: Welcome to the dazzling world of lab-grown diamonds, where science meets sparkle! If you've ever...
    IT Providers

    How Do Outsourced IT Providers Fuel Business Growth?

    In an era where technology seamlessly integrates into every facet of a business, maintaining an...
    Workplace Diversity

    Navigating Workplace Diversity: Building Inclusive Teams and Fostering Cultural Understanding

    In today's globalized and interconnected world, workplace diversity has become more than just a buzzword—it's...
    Eyewear Innovations

    Eyewear Innovations: How Eyebuydirect CEO Sunny Jiang Is Leading the Way

    With the increasing use of digital devices and the widespread promotion of eye health, vision,...
    Client Meetings

    Why Schedule Commercial Cleaning Before Client Meetings?

    First impressions hold immense power, especially in the business world. How you and your environment...
    MBA Programme

    Dual Degree MBA Programme: A Unique Educational Opportunity

    In today's world, professional success requires more than traditional management skills. It calls for a...
    women ipl

    Women IPL Sensation Shreyanka Patil: From Fan to Champion

    In a cricketing universe usually ruled by dudes, Shreyanka Patil, the rookie wonder for Royal...
    Monetize Magnet

    Monetize Magnet Review – The Best Crypto and Forex CPA Network

    In today's world, cryptocurrency has reached new heights, expanding continuously and providing online earning opportunities...
    celsius drink

    Celsius Drink – What Is It and How Safe Is It?

    These days, you must come across your social media feeds with an advertisement for a...
    low porosity hair

    Low Porosity Hair Problem? Slay Locks with Moisture Miracle

    Have you ever experienced your hair being stubbornly resistant to moisture? That's low porosity hair...