Top economist warns US could be entering a 'jobs recession' — thanks to Trump's tariffs
It is no secret that the American economy is not in the best shape. Prices are up thanks to inflation and the government’s tariffs, and the job market’s condition is not any better either. Several are left unemployed, and layoffs are still underway, with reports of the same regularly doing the rounds. This is a clear sign that millions of Americans are just barely getting by somehow, and according to Mark Zandi of Moody’s Analytics, that’s “fodder for a recession.”
As far as the job market is concerned, hiring has stagnated, but layoffs show no signs of slowing down. Unemployment is on the rise as a result, and Zandi believes that if this trend of laying off employees continues, one will see a serious jobs recession. The economist believes that the process has already begun, as per a report in Fortune. "If we actually do see layoffs pick up, then it certainly would be a jobs recession,” he said.
The government recently released employment data for the month of October, which was delayed due to the shutdown earlier this year, and it does not paint an optimistic picture. Zandi, however, was already aware of this, as he had been using private data to see how the job market had been performing this year. Sure enough, job openings since the summer have only grown by a few hundred thousand.
In comparison, layoffs have gone up, but quit rates have come down. This means that employees aren’t as confident as they used to be about leaving their jobs, perhaps due to the worsening job market. Zandi also noted that hiring has remained consistent at 3.2% as several employers are opting to go for a low-hire, low-fire policy. This means that they are sticking with a certain group of employees for the time being and are rarely making changes to that workforce.
Zandi did a lot of his research from private data, some of which was released by ADP. Its report stated that private employers cut 32,000 jobs in November, and almost all of them came from small businesses, which made 120,000 positions null and void in the past years. This is not random. As far as Zandi is concerned, he believes that President Donald Trump’s tariffs have had a big role to play.
“If you look at when job growth really came to a standstill, it is back soon after Liberation Day,” he said. It’s no wonder that smaller businesses had to let people go and eliminate positions. The tariffs have imposed high costs on individuals and businesses. Unlike the big ones, smaller businesses do not have a financial buffer, and often, the wage bill is compromised in such situations.
Zandi has said that the earliest fractures appear among employers and businesses most sensitive to such policy changes and price shifts. These fractures then spread outward as the condition worsens through broader layoffs. The job market, for now, is definitely not looking good for the country.
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