On Thursday, Fox Business posted the following headline:
Layoffs surged 136% in January to second-highest level on record
The article reports:
The pace of job cuts by U.S. employers accelerated at the start of 2024, a sign the labor market is starting to deteriorate in the face of ongoing inflation and high interest rates.
That is according to a new report published by Challenger, Gray & Christmas, which found that companies planned 82,307 job cuts in January, a substantial 136% increase from the previous month. However, that is down about 20% from the same time one year ago. It marked the second-highest layoff total for the month of January in data going back to 2009.
“Waves of layoff announcements hit U.S.-based companies in January after a quiet fourth quarter,” said Andy Challenger, senior vice president of Challenger, Gray & Christmas. The cuts were “driven by broader economic trends and a strategic shift towards increased automation and AI adoption in various sectors, though in most cases, companies point to cost-cutting as the main driver for layoffs.”
According to the Bureau of Labor Statistics, the workforce participation rate has remained steady since December at 62.5, down from 62.8 in November. Generally hiring is up in November due to Christmas shoppers.
The article concludes:
Another source of layoffs in January was retail stores, which trimmed 5,364 positions in January, a significant increase from the 110 layoffs announced in December.
The top reason cited for job cuts last month was restructuring; companies blamed stores closing and artificial intelligence for the layoffs, as well.
The labor market has remained historically tight over the past year, defying economists’ expectations for a slowdown. Although economists say it is beginning to normalize after last year’s blistering pace, it is nowhere near breaking.
The findings precede the release of the more closely watched January jobs report from the Labor Department on Friday morning, which is expected to show that employers hired 180,000 workers, following a gain of 216,000 in December.
The unemployment rate is expected to inch higher to 3.8%.
As more people are laid off, there will be less demand for consumer goods. This theoretically will slow inflation, but at the cost of the American people. If the government truly wanted to slow inflation without hurting the average American, they would cut government spending, but that is not likely to happen.