Once the country’s fastest-growing sector, the number of technology companies laying off employees every month since January has risen to 95 in June, affecting more than 48,000 people. data from troupe,
And layoffs aren’t limited to the tech sector.
Jumper, the largest privately owned rental platform in North America, announced it would lay off 15% of its workforce last Thursday. Two weeks ago, major electric vehicle maker, Tesla, announced it would lay off 10% of its salaried workforce.
And after demand fell 17% in May, popular real estate brokerage Redfin recently announced plans to lay off about 470 employees, 6% of its workforce.
“I said we would not lay off people,” Redfin CEO Glenn Kellman wrote in a company-wide email sent out on June 14.
These downsizes are fueling fears of an economic downturn, with a growing number of business leaders and US consumers reassuring that the economy has begun to decline.
More than 60% of executives and 82% of consumers expect a recession by 2023, according to separate surveys conducted by the Conference Board and Country Financial.
Former Treasury Secretary Larry Summers is also anticipating a decline.
“Nothing is certain and there is uncertainty in all economic forecasts,” he told Meet the Press on Sunday, “but my best guess is a recession is ahead.”
“I base this on the fact that we don’t have a situation like the current one, with unemployment above 4% below 4%, without a recession within a year or two,” he said.
President Joe Biden and Federal Reserve Chairman Jerome Powell have responded to these concerns by trying to reassure the public that a recession is “not imminent”, and that higher employment numbers will help Americans cope with rising costs in the near future. Will do
“We are no longer trying to induce a recession. Let’s be clear about that,” Powell said during a press conference last Wednesday after raising interest rates by 75 basis points.
“We at the Fed understand the difficulty that inflation has caused,” he said. “We are strongly committed to bringing inflation back down, and we are moving rapidly to do so.”
Despite these reassuring efforts by officials, American consumers and businesses remain concerned about rising costs and a deteriorating economic environment.
And some recent estimates add credibility to these claims.
During last week’s Federal Open Market Committee meeting, the average forecast for real GDP growth in 2022 was cut from 2.8% to 1.7%. Additionally, while the national unemployment rate has been around 3.6% over the past three months, US Federal Reserve economist It is now expected that this number will reach 3.9% by 2023.
And while it’s true that Americans, especially low-income people, have seen significant wage increases over the past year, for many, this increase hasn’t kept pace with annual inflation rates on staples like food, energy, and housing. has kept. US Bureau of Economic Analysis.
And many Americans are increasingly understanding that the White House is out of touch with the experiences of everyday Americans, said political analyst Frank Luntz.
He went on CNBC last Friday and predicted the election would show his disappointment.
“Donald Trump misidentified the stock market as the factor when he decided whether things were good or bad,” he said. “Joe Biden is misidentifying jobs.”
“Unless he gets this inflation under control, where people are not angry, and unless he does something immediately, it is going to affect the medium term,” he said.
Before news of negative GDP growth broke out in the first quarter of 2022, Biden had an approval rating of 42%. Since then, according to Reuters, it has continued to decline by about 36% compared to the previous week.
But despite deteriorating approval ratings and media speculation, President Biden continues to urge Americans to remain calm.
“Be reassured,” he told Americans in a sit-down interview with the Associated Press last Thursday while discussing the economy. “We are in a stronger position than any other country in the world to overcome this inflation.”
“It’s not an exaggeration. It’s a fact,” he later added.
And while some pundits criticize Biden for being out of touch, Dr. Aaron Sojourner, an economist and senior researcher who worked in both the Obama and Trump administrations, agrees with the president that the American consumer is in a relatively strong financial position.
While prices have clearly increased across the board, he argues, the average American household has more money and is better positioned to absorb these costs than it was just two years ago.
Cautious not to predict a recession, he also advised against using any single indicator, such as layoffs, as an absolute measure of the economy.
“My impression so far is that it has been isolated to a very small group of companies,” he said. newsweek, “There are 6 million employers in the country, so dozens of companies is still too small to say anything.”
Chelsea Moore, director of wealth management and financial planning at Country Financial, agreed with the assessment. While his company’s survey data showed rising fears of a recession, he said none of the results are set in stone.
“Any measure of the economy is huge and complex,” she said. Greeley Tribune, “So There’s certainly no one measurement that’s going to tell the whole story.”
“But I think businesses and consumers have a lot more cushion today than they did in 2008,” she said.