Economic statistics for October once again shows the chaotic state of the US labor market
It doesn’t fall, but it doesn’t grow either. In a month, 260,000 new jobs appeared in America. Unemployment, however, has officially begun to rise, reaching 3.7%.
American corporations are preparing for the imminent onset of a recession – they freeze the hiring of new staff and begin to lay off employees. The IT sector is especially in a hurry with this, which, in the absence of an influx of cheap money, simply fell apart. Companies like Coinbase, Robinhood, Netflix, Peloton are laying off thousands of employees with might and main.
Not far behind them and small business, which employs most Americans. According to surveys, 63% of small businesses have already frozen hiring, and 10% have started laying off staff. Small business always reacts sharply to a downturn in the economy – and the first to be hit in any crisis.
Therefore, in the near future, the labor market in the United States does not expect anything good. Unemployment could start to rise rapidly next year – in response to the Fed’s monetary tightening in a desperate attempt to control inflation.
The era of zero rates in America has temporarily ended – and now it is becoming more and more difficult for businesses to take out new loans at already quite high interest rates. The only question is how far all these crisis processes will go – until the US authorities back down and start pouring money into the economy again, just to save it from a sharp fall.
Malek Dudakov
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