Correspondingly the unemployment rate fell to 3.5 percent, at its prior low before the pandemic. But, as economists have noted, fears of recession are not apparent, as Chris Varvares, cohead of US economics for S&P Global Market Intelligence told The New York Times, “If the U.S. economy is slipping into recession nobody told the labor market.”
The good news for the Feds is that their actions are beginning to show promise, with predictions that unemployment will rise to 4.6 percent in a further move to cut inflation.
There have been some gains in labor force participation, to 62.3, but that hardly moved the dial as we have seen that for some time.
Some alarm in the areas of big shops such as Amazon which is laying off 18,000 workers but some speculate that with the massive hiring that was done when the demand for goods tripled during the pandemic lockdown, that with a corresponding move towards service, rather than goods, this crash is inevitable.
Temporary services are taking a hit cutting 35,000 jobs, but may be a cautionary measure than an actual reflection of nervous employers, since they are not direct hires, and can be brought back, if needed in the future, and can show some gains on the balance sheet to sooth investor nerves.
Sales Force the cloud based software developer has laid off 8,000 employees at best guess,1o percent of its employees, but will reflect only a partial savings on the final quarter of $800 million to $1 billion being recorded; a bit of finangling allowed to spread the loss across other quarters.
Attribution is given to a global downturn for the change in consumer habits rom the pandemic lockdown when vast swaths of office workers, used their home offices, rather than their corporate office spaces, and an overestimate of aggressive sales said Chief Executive Marc Benioff,in a move that most analysts say is a well calculated gamble to salvage profits.
There are still many employers that are anxious to find the right person for the right jobs and this is what is still fueling most of the gains in the American workforce.
That may not satisfy Fed Chair Jerome Powell who said not only does the Fed have more work to do, but, “we’ve continually expected to make faster progress on inflation than we have,” this past Friday, after the report was released.
What’s left? Another 5.1 raise by the end of 2023, which is another three quarter point adjustment, and equals a half percentage point higher increase than previously planned.
Powell also said to expect rates to remain high for some time, and while scant consolation to the stock market, it creates fear of layoffs, as many have cautioned, including Sen. Elizabeth Warren as we reported last month, but most economical forecasts say that pain is inevitable, as the Times opined, “central bankers believe it is necessary to prevent price increases from beginning to feed on themselves.”
What no one wants is a repeat of the 1970s where inflation remained for years and the added oil price from global prices shot up prices, and the Fed pushed rates to almost 20 percent and unemployment to double digits for a cool down..
