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July 25, 2024
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Alarm bells have been ringing as fears of a recession take hold of the public. The massive layoffs that hit as we were ending 2023 and starting 2024 did nothing but fan the flames, but are these fears unfounded, or is this news being taken out of proportion in a self-regulating job market?
Getting laid off is no joke, as it can severely impact your career and finances, but also remaining at a company where people have been laid off can bring up survivor’s guilt. Read what top publications have to say about the 2024 layoffs and what they predict will happen in the rest of the year’s job market.
According to a Business Insider article by Jennifer Sor, the United States might already be in a recession, even though certain traditional tools didn’t forecast it. The economy has been booming, adding over 300,000 workers in March, yet the unemployment rate has continued to rise steadily.
According to TD, recession indicators are some of the signs that economists are on the lookout to predict a recession. A recession can be defined as a “general decline in economic activity and a widespread drop in spending.”
Danielle DiMartino Booth, a Quill Intelligence Research chief strategist, points out that the rise of the unemployment rate is a clear sign of an impending recession, just as it happened in 2008.
“So we’re in a recession, as far as the unemployment rate is concerned.”
This does not bode well, especially since layoffs rose 10% year-over-year in February and could hit 370,000 by the end of April. These are the highest numbers since 2009.
On the other hand, CNBC’s Jeff Cox presents a more positive outlook, as he argues that these cuts have been mainly concentrated in some industries and that we’re closer to the end of the tunnel.
The outplacement firm Challenger, Gray & Christmas reports that February has been the worst since 2009. They mention that back then, the next month was when the financial markets bottomed out, and then the longest economic expansion started, thus giving workers and companies a glimpse of hope.
Still, they point out that most of these massive layoffs have been specifically in some industries. If you’re asking who is the most vulnerable to layoffs, the answer so far has been the tech industry, financial firms, manufacturing, energy, and education. The first two had a bad 2023, but the last three had a bad 2024.
“The layoff numbers, however, are not feeding through to weekly jobless claims, suggesting that unemployment is short-lived and workers are able to find new positions.”
Challenger comes to the conclusion that most layoffs are because of tech. Technology, automation, and artificial intelligence have been growing exponentially in the last few years, making companies restructure their plans to fit into a different landscape. Thankfully, according to the Department of Labor’s weekly jobless claims, unemployment is short-lived.
Amina Niasse writes for Reuters about how tech and government jobs were being cut in March despite a still strong labor market. She also cites the Challenger, Gray & Christmas report and comes to a similar conclusion to CNBC’s.
Even though the main industries that are cutting jobs are the tech industry, financial firms, manufacturing, energy, and education, the author points out that the main employer firing people is the government.
“The U.S. government was the top job cutter last month, accounting for 36,044 announced layoffs, the highest since September 2011 and occurring largely within Veterans Affairs and the United States Army.”
Still, job cuts amount to 257,254 layoffs in 2024, down from 270,416 in last year’s first quarter. Not only that, they speculate that the reason for such a strong job market, despite the layoffs, lies in the 184,000 private-sector jobs created in February, which would bring the total to 200,000 payroll jobs added in March, according to ADP.
Even though tech layoffs made 2024 feel like it was starting with a weak labor market and a recession, things are looking up for most people. The private sector has been pulling their weight by adding jobs, helping many find a new gig quickly, thus keeping unemployment rather low. Still, it should never be too careless when it comes to the possibility of a recession, which is why economists are always looking at forecasting tools, though it appears that the worst has been left behind.
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