Despite the Biden administration's claims that the job market is buoyant, U.S. workers have been hit by a wave of layoffs since the start of the year as companies adjust to tough market conditions.
Since the beginning of the year, many companies have announced layoffs. report The number of positions cut by employers in January jumped 136% compared to December, according to a study by outplacement firm Challenger, Gray & Christmas. President Joe Biden is pointed Employment increased significantly in January and inflation also slowed. evidence His economic policies continue to impact the U.S. despite a growing number of workers being laid off as employers seek to cut operating expenses to adjust to rising costs due to persistent inflation and high interest rates. He said that it is functioning for the people. (Related: It's not what you imagined: Americans are completely crushed by sky-high rents)
Peter Earle, an economist at the National Bureau of Economic Research, said: “Many of the layoffs we're seeing are widespread, but in the case of big technology companies, they're getting a lot of headlines, but they're not reducing profitability. It is tied to efforts to maintain the he told the Daily Caller News Foundation. “Inflation has increased prices for consumers as well as producers in recent years, and the general price level (based on the Consumer Price Index) is still rising more than 3% annually. The last time interest rates were raised was in July 2023, and those rate hikes are starting to have an impact. As a result, margins are being squeezed due to increases in both operating and financing costs, and business owners and executives are We need to cut costs wherever possible. Unfortunately, the process of cutting costs often starts with headcount.”
UPS announced in late January that it would lay off 12,000 employees in an effort to reduce operating costs, citing a new union agreement as the cause of increased labor costs.
DocuSign furloughed 6% of its workforce, Estée Lauder cut 5% of its workforce, Snap reduced its workforce by 10%, and Zoom cut its workforce by 15% a year ago After that, we plan to reduce the amount by another 2%. according to To the Wall Street Journal.
Layoffs are becoming more widespread in the tech industry, especially among tech giants, which began announcing job cuts last year. Google plans to cut its global workforce by about 6%, while Meta, Alphabet, Amazon and Microsoft recently cut 50,000 jobs. according to to Forbes.
Media companies such as the Los Angeles Times, CNN, Washington Post, and Sports Illustrated are also cutting staff. NPR, Vice Media, and others have also announced layoffs. according to On CNN.
Inflation is driving up costs for consumers and producers alike, with the consumer price index rising 17.6% since Biden took office in January 2021. according to to the Federal Reserve Bank of St. Louis. Most recently, inflation rose 3.4% in December from a year earlier, well above the Federal Reserve's 2% target.
“If you look at the employment numbers over the past few months, growth has come primarily from government jobs and industries that are highly dependent on government (social services and health care),” said Michael, chief economist and senior advisor at the U.S. Center.・Mr. Volkender said. Thrive, he told DCNF. “Sectors that rely primarily on the private sector are struggling, which is a natural consequence of increased government spending and regulation.”
Job growth beat expectations in January, with the U.S. economy adding 353,000 nonfarm jobs while the unemployment rate remained low at 3.7%. Recent job growth has been primarily accounted for by three sectors, with private education and health services adding 557,000 jobs in the past six months, and government adding 298,000 jobs over the same period. 195,000 jobs added in the leisure and hospitality sector. according to to the Bureau of Labor Statistics.
2024 staff reduction announcements:
– PayPal cuts 9% of its workforce (today!)
– UPS cuts +12,000 roles (today!)
– Microsoft cuts +1,900 roles
– Twitch cuts 35% of its workforce
– Unity Software 25%
– Brex 20%
– Discord 17%
– Wayfair 13%
– Riot Games 11%
– Duolingo 10%
– Please rent…— Genevieve Roch-Decter, CFA (@GRDecter) January 30, 2024
Government spending also increased significantly in the fourth quarter of 2023, pushing out private spending and job growth, and the federal deficit rose by more than $800 billion in that quarter alone. As a result of massive government spending, the US national debt has increased to more than $34 trillion.
“We closely monitor all reports of Americans losing their jobs,” a White House spokesperson told DCNF. I know if there is,” he said. “Thanks to a strong economy under President Biden, the number of layoffs is nearing record lows. In fact, even before COVID-19, they are lower than the average under the previous administration.
For a decade before the COVID-19 pandemic, the number of layoffs and layoffs had been relatively stable, ranging from 1.6 million to 2 million people, but in March 2020, it was around 13 million. The number of people has increased rapidly. according to to the Federal Reserve Bank of St. Louis. After mass layoffs due to the pandemic-induced economic slowdown, furloughs and layoffs receded to an all-time low of about 1.3 million people in June 2021, but then began to increase as the labor market adjusted to current market conditions, starting in December 2021. The number of visitors exceeded 1.6 million.
The Federal Reserve has set the federal funds rate in the range of 5.25% to 5.50%, the highest level in 22 years, in an attempt to curb soaring inflation, which increases the cost of credit and discourages many companies from funding. There is a shortage. Increase in capital to continue current operations. The Fed expects interest rates to be cut to 4.6% by the end of 2024, potentially providing relief to businesses and consumers.
“The fact that so many companies across a variety of sectors are currently laying off employees suggests that the massive expansion in the money supply in early 2020 has mislead entrepreneurs and business executives to expand their businesses and “This is a clear sign that we are leading to unnecessary lengthening of the production structure,” Earl told DCNF. “Financial crime is the driving force behind the boom-bust cycle, and therefore the Federal Reserve's policies are responsible for the series of failures by entrepreneurs and the subsequent economic upheavals.”
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