Layoffs Surge, Spending Soars — What’s Really Happening
Happy Friday! Brian Manning of the Weekly Update—let’s get right to it. I know I took a couple of weeks off; super stoked to be back doing this again. We’ve got a lot to talk about.
So, Monday this week, we got feedback on Black Friday spending. What is happening with the consumer right now, and how are they spending money? Black Friday spending was up 9 percent, and twelve billion dollars was the total amount of money spent by consumers on Black Friday. It certainly seems like consumers are feeling somewhat confident about the economy right now, considering that spending was up at 9 percent.
Then Tuesday was a quiet news day; not a lot to talk about there.
Wednesday, though, we get ADP. ADP is the largest provider of private payrolls in the U.S. This is looking at the month of November. What did hiring look like across the country in the month of November? Expectations were that we’d see forty thousand jobs created across the country in the month of November. But what ADP came out and said was that we had thirty-two thousand job losses. So not only were jobs not created across the country, we actually had a depletion of jobs by thirty-two thousand across the country.
It shows that small businesses were hardest hit. And this is impactful because if we look at the employment pool for all of us as consumers—or as employees, excuse me—across the country, 46 percent of us work for small businesses. So I was definitely impacted there for sure.
What I understand is you have all these Federal Reserve members on parade saying, “Oh, my gosh, employment is so good. The economy is so stable. Employment is so good”. Well, if the employment and the U.S. economy is so strong, how come in the month of November we shed thirty-two thousand jobs? Doesn’t make sense to me. I don’t know what they’re looking at.
Also, we look at job switchers. If you look at the pandemic, someone that switched a job from one company to another would receive a significant financial benefit for doing that. And that is now at only a one point nine percent gain. This is the lowest number in 5 years. That means it’s almost parallel; if you move from one company to another, you’re not really seeing any big financial advantage like people did during the pandemic.
Then Thursdays we get feedback on layoffs. Companies that are going to do large layoffs have to have a filing, and right now we have a filing. It looks like the prior month was seventy-one thousand upcoming layoffs, but the total layoffs declared year to date right now are at one point two million. This is the highest number since two thousand and ten. So, unfortunately, we’re still seeing some cracks in the labor market there.
Then today we get the PCE. This is the Personal Consumption Expenditure. This is the Federal Reserve’s favorite gauge of inflation. If we look at the headline number, the headline number rose from 2.7 to 2.9 percent, but we’re really more focused on the core number. The core number strips out volatile items such as food and energy, and the core number went from 2.9 percent down to 2.8.
This is important because next week we have a Federal Reserve meeting. At the end of the meeting, it’s very widely anticipated that Jerome Powell is going to cut interest rates because inflation has started to move a little bit lower and employment is not looking that strong across the country, as we have already talked about. So this is probably aligning everything right now to see a quarter percent cut next week. Can’t guarantee it—not for sure that’s going to happen—but that’s my prediction: that we might see a quarter percent cut next week because of everything that I’ve just explained.
I’m around going into the holidays, the month of December. If you have any questions, reach out to us. I’m available 7 days a week, 8 a.m. to 8 p.m.. Call me, text me. Even if you’re just poking around and you want to ask some questions, reach out to me. We’re here; we’d love to help you. Have a great day. Talk with you soon.
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