As the United States grapples with low job growth and fears of a recession, companies in North America are going on lay-off drives.
As companies across the United States and Canada lay-off thousands of staffers, they optimise their businesses but add to the unemployment in the countries. The lay-offs are also bound to lead to disposable incomes and savings. Warning signs are already flashing.
Last week, the US government reported that recruitment fell sharpy and unemployment rate grew for the fourth consecutive month.
The US economy added 114,000 fewer jobs in July, around 35 per cent fewer than expectations, according to the US Department of Labor.
It also reported that US unemployment rate rose to 4.3 per cent.
In Canada, around 2,800 jobs were lost in July and the unemployment rate was its highest in more than two-and-a-half years, according to Reuters.
The agency further reported that July was the second straight month for job losses as unemployment rate stood at the 30-month high of 6.4 per cent.
Well above 50,000 job cuts announced this year
More than 50,000 job cuts have been announced so far this year, according to tally by Reuters.
The actual number is actually much higher than the 50,000 mark and it is just an estimate.
The figures in the Reuters tally added to around 45,000 jobs but as several companies did not give the specific number of job cuts gave percentage of staffers to be laid off, it is understood that the total number would be well above 50,000.
For example, Amazon said it would cut 5-35 per cent jobs in various divisions, Intel and Paramount separately said they would each cut 15 per cent of jobs, and electric vehicle (EV)-makers Tesla and Lucid separately said they would 10 per cent and 6 per cent of jobs respectively, BlackRock said it would 3 per cent jobs, and Levi Strauss & Co said it would 10-15 per cent jobs, among others.
For the companies whose numbers were available, the notable cuts include: 20,000 jobs at Citi Bank over next two years, 2,500 jobs at PayPal, 4,800 jobs at Bell Canada, 1,000 jobs at British media group Sky, 1,900 jobs at Microsoft-owned Activision Blizzard, 12,000 jobs at UPS, and 1,700-2,000 jobs at FedEX. This is not the exhaustive list.
Will there be recession in US?
Amid job cuts and slowing job growth, warnings for a recession in the United States have surfaced.
One economist has said the American middle class has effectively been in recession for a while and now recession is also reaching the Wall Street.
In a separate assessment, JP Morgan has also increased the possibility of a recession in the United States later this year.
In an interview with Fox Business, Macro Mavens President Stephanie Pomboy said the United States is witnessing the beginning of an economic “reckoning”. She said that the Wall Street is now just catching with the consumers’ recession that already exists.
Pomboy said, “There’s a lot of pain ahead of us…Middle America has been in recession for a long time. And again, Wall Street has kind of ignored it. But I think that’s all starting to catch up now, and the payroll report really focused attention in a way that Wall Street could no longer ignore.”
Separately, JP Morgan has raised the chances of a recession in the United States later this year to 35 per cent from the previous 25 per cent, according to Fox.
The estimate is worse for next year. For the second half of 2025, the odds are at 45 per cent.
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Publish date : 2024-08-09 04:39:00
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