This Might Be the Most Warning You Get
On September 20th, CNBC published the video, “Will This Recession See Massive Layoffs?” That’s pretty interesting considering we’ve been told repeatedly that we’re not in a recession. OK, perhaps “technically” we are, but not really because look at how hawt the job market is. 😣
It seems the ball is inching down the court. As if to say: OK, maybe we’ll concede we’re in a recession or thereabouts, so will we get mass layoffs this time around?
Jeez.
From the CNBC blurb on YouTube:
“From red-hot inflation to a strong jobs market, and all the negative gross domestic product in between, economists are divided on the health of the U.S. economy. A top concern for Americans: Are there layoffs on the horizon? Economists break down the data and economic indicator complexities brought upon by the Covid pandemic and the war in Europe.
More corporate leaders are anticipating a recession, according to a survey from Stifel.
Big companies are already announcing layoffs, including Best Buy, Ford Motor, HBO Max, Peloton, Shopify, Walmart and Wayfair.
Meanwhile, a survey from PwC shows 50% of firms expect to reduce their labor forces in the next six to 12 months.
This comes at a time when the labor market could hardly appear stronger. In July 2022, there were 11.2 million job openings, revealing a shortage of workers for available positions.
‘I think it’s very important to look at the number of job openings,’ Julia Pollak, chief economist at ZipRecruiter, told CNBC. ‘The question is how steeply they will fall, how sharply they will fall, if they go back to 7 million [job openings], the level before the pandemic.’
Not to mention, the labor market is facing off against the ‘Great Resignation.’ In July, 6.4 million people got new jobs, while another 4.2 million quit jobs.
‘The Federal Reserve is raising interest rates at this point in an effort to slow down the job market, and that’s going to mean more layoffs,’ Zandi said.
Federal Reserve Chairman Jerome Powell said it will be a challenge ‘to return to an environment of stable prices without sacrificing the economic gains of the past two years’ during a question-and-answer session at the Cato Institute, a Washington, D.C.-based think tank, earlier this month.”
Wow. A lot going on there. A few thoughts in freeform:
➡️ IMO, the Great Resignation is over. It’s done-zo, particularly for white collar work. Think Tony Stark saying, “The Avengers broke up. We’re toast.” There may still be job-hopping in industries like retail and hospitality. But as far as roles in engineering, accounting & finance, IT, construction, project management, etc., no, I am not seeing nearly as many people hippity-hopping across the job market as I did last summer. I would liken it to the housing market when, last summer, sellers acted like their 💩 didn’t stink and you had better show up with a bouquet of roses and $200K over asking just to have a shot. Those houses are now sitting on the market with no takers. More workers are starting to pull back — just as homebuyers did— and say, “Wait a minute. I think I should probably sit tight a little while and see where this economy is going.” I respect that. I feel like it’s a wise decision sometimes in life to sit on the sidelines and survey the scene. Many companies are also pulling back and being careful about which positions they fill. The days of “over-hiring to account for attrition” have ended.
➡️ Using out-of-date statistics to prove a point is ridiculous. Similarly, using statistics that were probably fake as hell to begin with to play pretend that the labor market is blowin’ and goin’ and all’s well is ridiculous. And shameful.
➡️ It’s worth noting that the day after this video was published, The Fed had another .75% rate hike. So if we agree with the idea that higher interest rates will also equal more layoffs, what do you think is around the corner?
➡️ I feel like naïveté comes at too high a price. At the risk of sounding cynical or tin foil hat’ish, this might be the most warning you get. In other words: this video feels to me like an early warning of what’s down the road. I could be wrong and I definitely do not claim to know precisely what’s brewing up. 1982 recession 2.0? 2008 Great Recession/Global Financial Crisis 2.0? 1970s stagflation revisited? I dunno. But I’ve said repeatedly, basically on any platform I can find, that I believe you are playing a dangerous game if you are waiting to be “officially” told that the economy is in trouble. The CNBC video is such a depressing yet elegant example of why I have said that. 😔
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