In the latest sign that the Trump recession may have arrived, job layoffs have now risen to the highest level since 2009, according to a new report from outplacement firm Challenger, Gary & Christmas.
“Total announced cuts hit 190,410, a 10.3 percent increase from the fourth quarter and 35.6 percent jump from the same period a year ago. The level was worst period overall since the third quarter of 2015 and the highest level for a first quarter since 2009 as the economy was still mired in the financial crisis.”
Andrew Challenger, vice president of Challenger, Gray & Christmas, noted:
“Companies appear to be streamlining and updating their processes, and workforce reductions are increasingly becoming a part of these decisions. Consumer behavior and advances in technology are driving many of these cuts.”
On Friday, the Bureau of Labor Statistics announced that nonfarm payrolls expanded by 196,000 and the unemployment rate held steady at 3.8 percent. Job creation numbers for February had fallen drastically to a mere 20,000, but the March numbers seem to suggest some good news for the economy.
However, the layoff numbers are especially troubling because they were across all sectors:
“The auto industry led by sector in March with 8,838 layoffs, followed by energy with 8,149 cuts. Financial firms were next with 4,884, while retail followed with 4,860. Retail has announced 46,061 cuts this year, an 18.5 percent decrease from the first quarter of 2018.”
Does this mean the U.S. economy is slowing down and about to enter a recessionary period? Andrew Challenger said he sees a downturn on the horizon:
“Several indications, such as the number of companies filing for bankruptcy or closing operations, suggest we’re heading for a downturn. The recent proposal to close the southern border adds to the uncertainty and may contribute to more cuts as companies try to adapt.”
Other economists have also been predicting that a recession will arrive this year or in 2020, which could prove disastrous for President Donald Trump’s re-election efforts.
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