Ryan Stancil,
Editor
Aug. 15, 2022
Just over a month ago, I wrote an editorial talking about layoffs across the tech sector.
I mentioned how the job cuts were unlikely to stay contained to what we had seen at the time and that the house of cards was slowly beginning to collapse.
Over the past 30-something days that collapse has continued.
Any quick search of “layoffs” will bring up a long list of news stories from just the past few days. You’ll see names like Microsoft, Snap, Oracle, and other big-name tech firms.
But you’ll also see names like JP Morgan Chase, Ford, Rivian, Groupon, and Coinbase.
So what started in tech is slowly creeping toward other industries.
Given this news, it makes sense that job loss is becoming a growing topic of concern for many Americans. Recent polling from Insight Global found that 78% of American workers fear for their jobs as the recession trudges along. 56% of the people polled aren’t financially prepared for the layoffs.
When the GDP number came out at the end of July and showed a second straight quarter of negative growth, the chorus of voices saying layoffs were on the horizon grew.
And with that came the headlines and the articles.
This goes hand in hand with recent reports that jobless claims have risen again.
Applications for unemployment insurance in the US rose to 262,000 for the week ending August 6, which was about what economists largely predicted. That’s the highest level since November and it’s the latest in a slow and steady trend of rising rates of unemployment claims.
It does come in below the range those same economists say would signal a significant slowdown in the labor market, but barely so. So if the trend continues, expect the headlines to reflect the fact that the labor market has officially slowed.
Whether we’ll get there or not is largely dependent on the Fed.
Officials have already signaled that they aren’t done when it comes to raising rates. Because while inflation has slowed over these past few weeks, it hasn’t slowed enough for the liking of Jerome and company.
Consumer prices didn’t rise in July compared to June, so it would seem as though the Fed has no reason to deviate from the current course. That means they’ll likely carry on with the plan to keep raising, which means slowed economic activity and a wonky labor market where unemployment rises even as more jobs are created.
That’s all to say there isn’t much most people can do but prepare.
The pace of layoffs seems to be picking up steam as companies pare back. Consumers are going to spend less on things they don’t absolutely need, which will create a sort of feedback loop.
Those rising jobless claims exist as news stories now, but it won’t be long before you hear about it affecting someone you know if that hasn’t already happened.
Coming out of a market like that unscathed means navigating it in a way that lets you make money despite volatility and uncertainty.
With costs going up, safety nets eroding, and leadership seemingly doing everything except helping the people they’ve sworn to serve, it’s up to you to generate your own wealth as an investor.
This is exactly how you can do it.
Ryan Stancil
Editor, Daily Profit Cycle