Quote:
Originally Posted by Chick Webb
As they say, "A downturn is when your neighbor loses his job. A recession is when you lose your job." So, I agree to a degree, but it does seem that things are slowing and in some sectors pretty rapidly, doesn't it?
To wit. Job growth peaked in December and has been dropping all year; in May it was only 128,000 according to ADP. There were a lot of layoffs last month and it continues this month. Numerous tech firms have cut staff or frozen hiring, the mortgage industry is reeling, used car companies are scaling back, and even manufacturing companies are starting to cut back. The crypto kiddies have gotten hammered and while that won't kill the economy wrti large, it'll have local effects where there's a concentration of people invested and in crypto. In the crypto hub of Miami (where their self-minted Miami coin is now almost worthless), they're seeing dislocations already.
Those people who have lost their jobs will absolutely not be spending money. Vacations will not be taken, cars will not be purchased, homes and all the things in them will have to wait. In the locales where those people live (thousands in SF, for example), that means jobs that are dependent on them will start to bleed off. The people that those who've lost their jobs live and (used to) work with will start to fret about their own situations and cut back their spending. Consumer sentiment is already at its lowest point in a decade, and seeing that around you is just going to make it worse.
My point is that once that snowball starts rolling downhill it picks up steam and grows very quickly. Like the market, it can be "elevator down, escalator up." |
To be absolutely fair- the only real layoffs that have happened have been in-
1) Tech or massively overvalued / overstaffed companies that never made sense
2) Companies directly affected by Interest rates - i.e. the loan / mortgage / real estate services
3) manufacturing layoffs are imho just bad business practices... stellantis is a joke more than a legit car manufacturer that has no idea how to run a legit business... check stellantis stock over 1 year