Layoffs are increasing in the United States, according to recent research from Goldman Sachs.[0] Manuel Abecasis, a Goldman Sachs economist, found that the layoff rate for December and January was 1.1%, which is 0.2 percentage points higher than the 0.9% layoff rate reported in the November JOLTS report.[0] This rate corresponds to around 1.65 million job losses.[1]
Press reports have indicated that layoffs are rising, but they tend to overemphasize the technology sector. The official JOLTS data indicate that the economy-wide layoff rate remains low, but they are released with a lag.[1] Jan Hatzius, chief economist at Goldman Sachs, said “A key question is whether this pattern is now changing. Press reports indicate that layoffs are rising, but they tend to overemphasize the technology sector. The official JOLTS data indicate that the economy-wide layoff rate remains low, but they are released with a lag.[1]”
Since the end of 2000, the Bureau of Labor Statistics has monitored the portion of the labor force that has been discharged from their jobs each month.[2] Around 1.5% of the nonfarm private labor force is let go from their job in an average month.[2] If the percentage reaches 2% or higher, it is regarded as an employer’s market, and if it nears 1%, it is seen as a candidate’s market or a tight labor market.[2] The labor market has been competitive since the start of 2021.[3]
Employers have cut 110,800 temp workers in the last five months of 2022, including the 35,000 who were let go in December, the largest monthly drop since early 2021.[4] James Knightley, chief international economist at ING, said “For me, it’s a real warning sign. The jobs market may not be invulnerable to the downturn story.”[5]
With the surplus of vacant positions and a decrease in labor supply, American companies are anticipated to have difficulty filling vacancies in the near future.[2] It is also important to note that the U.S. Labor Department’s job openings report may have overlooked the recent upturn in layoffs.[0]
Overall, the 1.[1]
0. “Job openings data is missing a recent upturn in layoffs, Goldman economist says” Morningstar, 17 Jan. 2023, https://www.morningstar.com/news/marketwatch/20230117167/job-openings-data-is-missing-a-recent-upturn-in-layoffs-goldman-economist-says
1. “Goldman Economist Says US Layoffs Were Far Higher Than Labor Department Reported” The Epoch Times, 19 Jan. 2023, https://www.theepochtimes.com/goldman-economist-says-us-layoffs-were-far-higher-than-labor-department-reported_4994276.html
2. “Despite Layoffs, It’s Still a Workers’ Labor Market” HBR.org Daily, 30 Jan. 2023, https://hbr.org/2023/01/despite-layoffs-its-still-a-workers-labor-market
3. “US labor market remains tight despite tech layoffs” Greater Baton Rouge Business Report, 30 Jan. 2023, https://www.businessreport.com/business/us-labor-market-remains-tight-despite-tech-layoffs
4. “‘Real warning sign:’ More layoffs could be coming for U.S. employees” HRD America, 24 Jan. 2023, https://www.hcamag.com/us/specialization/recruitment/real-warning-sign-more-layoffs-could-be-coming-for-us-employees/433936
5. “Employers cut 35,000 temporary jobs last month. Economists say it may be a preview of what’s to come: ‘For me, it’s a real warning sign’” Yahoo! Voices, 24 Jan. 2023, https://www.yahoo.com/now/employers-cut-35-000-temporary-204948621.html