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Economic Times
3 days ago
- Business
- Economic Times
Jobs in USA: Massive lay offs could happen soon in USA, warn experts
Job lay offs threat is getting more prominent even as analysts are keeping a close eye on US economic data this week. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads FAQs Fear of possible lay offs is back as experts have cautioned that American companies could take drastic decision of downsizing the staff if they find President Donald Trump's global tariffs are not fruitful enough. Apprehensions have been raised after US private sector hiring hit its slowest pace since 2023 in May, according to data released by payroll firm ADP on Wednesday, as per a are keeping a close eye on US economic data this week, with official employment figures due Friday. While ADP figures may diverge from the government numbers, experts are monitoring the effects of Trump's global tariffs as they sweep through the world's biggest economy, AFP reported."This may be the tip of an iceberg, but it also could be a false start," said Carl Weinberg, chief economist at High Frequency Economics. "Whether this report is accurate or not, traders and investors will read today's number as a dark result for trading," he also cautioned that as companies get more clarity about tariffs, they could respond to the increased chance of tariff-induced cost hikes by becoming more aggressive about trimming their workforces."Manufacturing employment is suffering from higher input costs and disruptions to supply chains. At least one vehicle producer was forced to idle production during the first half of May; that is reminiscent of the pandemic," warned KPMG chief economist Diane Swonk in a recent now, US services sector activity shrank in May for the first time since mid-2024 too, according to the Institute for Supply Management, as Trump's tariffs fueled prices and sectors like leisure and hospitality, as well as financial activities, still logged gains, according to the ADP industries saw a net loss in jobs last month, with employment declining in mining and manufacturing. Some service sectors also saw job losses, including trade and transportation, as well as business services and education or health growth for those who remained in their jobs was little changed at 4.5 per cent. For those who switched jobs, pay growth was 7.0 per cent.A1. Federal Reserve Chair is Jerome Powell.A2. President of USA is Donald Trump.
Yahoo
4 days ago
- Business
- Yahoo
US labor market steadily easing amid tariff uncertainty
By Lucia Mutikani WASHINGTON (Reuters) -U.S. job openings increased in April, but layoffs posted their biggest rise in nine months, suggesting that labor market conditions were softening amid a dimming economic outlook because of tariffs. The Job Openings and Labor Turnover Survey, or JOLTS report, from the Labor Department on Tuesday also showed the number of people quitting their jobs for greener pastures declined by the most since last November. This was consistent with surveys showing consumers becoming less confident about the jobs market. Economists say the on-gain, off-again manner in which President Donald Trump's import duties are being implemented has left businesses in limbo and struggling to plan ahead. The labor market continues to anchor the economy. Despite the rise in April, layoffs remain relatively low. "We will call this report another indication of stasis in U.S. companies in the face of tariff uncertainty," said Carl Weinberg, chief economist at High Frequency Economics. "Once companies are more certain that bad times are coming, they will start to shed workers." Job openings, a measure of labor demand, rose 191,000 to 7.391 million by the last day of April, the Labor Department's Bureau of Labor Statistics said. Data for March was revised higher to 7.200 million open positions instead of the previously reported 7.192 million. Economists polled by Reuters had forecast 7.10 million vacancies. April's rise in vacancies was likely a correction following March's sharp decline. Unfilled positions were concentrated in the professional and business services as well as healthcare and social assistance sectors. Job openings at restaurants and bars dropped 135,000. There were also fewer postings in manufacturing, finance and insurance as well as state and local government education. Federal government vacancies rose 13,000 despite a hiring freeze implemented by the Trump administration amid cost cutting. The job openings rate rose to 4.4% from 4.3% in March. LAYOFFS RISE Layoffs increased 196,000, the largest rise since last July, to a still-low 1.786 million. Companies are hoarding workers after difficulties finding labor during and after the COVID-19 pandemic. The layoffs rate inched up to 1.1% from 1.0% in March. Layoffs increased in the professional and business services, healthcare and social assistance sectors as well as at restaurants and bars. There were also job cuts in construction and manufacturing industries. But there were fewer layoffs in the government sector. Though job postings increased, companies are generally hesitant to boost headcount. Hiring increased by 169,000 to 5.573 million, driven by construction, professional and business services, hotels and food services businesses. Hiring declined in the retail, finance and insurance sectors. A U.S. trade court last week blocked most of President Donald Trump's tariffs from going into effect, ruling that the president overstepped his authority. But the tariffs were temporarily reinstated by a federal appeals court a day later, adding to the uncertainty facing businesses. Americans are staying put in their jobs. The number of people quitting their jobs declined 150,000 to 3.194 million. The quits rate, viewed as a measure of labor market confidence, fell to 2.0% from 2.1% in March, also suggesting subsiding wage inflation. The Conference Board's labor market differential has narrowed considerably this year. That lack of confidence could be reinforced by May's employment report, which is scheduled for release on Friday. Nonfarm payrolls likely increased by 130,000 jobs last month after advancing by 177,000 in April, a Reuters survey of economists showed. The unemployment rate is forecast to hold steady at 4.2%, with greater risks of a rise to 4.3%.
CBS News
16-05-2025
- Business
- CBS News
Consumer confidence falls to lowest level in 3 years amid inflation fears, U. of Michigan index shows
Consumer sentiment in the U.S. edged down in May for a fifth straight month as Americans increasingly worry that President Trump's trade war will worsen inflation. The preliminary reading of the University of Michigan's closely watched consumer sentiment index, released Friday, declined 2.7% on a monthly basis to 50.8, the lowest reading since July 2022. Since January, sentiment has tumbled nearly 30%, a sign Americans are worried about the economy and their financial prospects, according to economists. "These survey results suggest that consumer spending may be increasingly restrained by caution under the Trump economic agenda," Carl B. Weinberg, chief economist at investor advisory firm High Frequency Economics, said in a research note. Weinberg added that the decline in confidence may cause Americans to hold back on purchasing big-ticket items until they have a clearer picture of what's happening in the economy. "Uncertainty usually foments a feeling in households that more saving is a good idea," he added. Less grim than it looks? Oliver Allen, senior U.S. economist with Pantheon Macroeconomics, noted that the U. of Michigan's initial survey likely failed to capture any improvement in sentiment from the U.S. and China agreeing to ease tariffs earlier this week. "[W]e increasingly suspect that the consumer surveys, and the Michigan survey in particular, are painting an unduly negative picture of the consumer outlook at present," Allen said in a report. "Headline retail sales eked out a further small gain in April, following a 1.7% jump in March, despite the recent plunge in confidence. Moreover, most near-real indicators of consumers' discretionary spending on services are holding up well." Trump in April slapped 145% tariffs on all imports from China, a move that effectively froze trade with the U.S.' third-largest trading partner in goods. But on Monday, the two countries said they agreed to lower U.S. tariffs to 30%, while China would cut its duties on U.S. exports to 10% from 125%. Separately, the U.S. earlier this month reached a trade deal with the United Kingdom, although trade experts said the agreement suggests high tariffs are set to remain in place for the foreseeable future. Mr. Trump on Friday said his administration will send letters that inform other nations of the tariff rates the U.S. will impose on imports. "[W]e have, at the same time, 150 countries that want to make a deal, but you're not able to see that many countries," Mr. Trump said during a Friday business roundtable between the U.S. and United Arab Emirates. Americans have largely taken a sour view about where the economy is headed in the wake of the Trump administration's imposition of huge import duties, which threaten to slow growth and push up prices. In recent weeks, the White House has pulled back on its most draconian policies, though average duties are still high by historical standards. In an April CBS News poll, 44% of Americans approved of Mr. Trump's handling of the economy, down from 51% on March 2.
CBS News
16-05-2025
- Business
- CBS News
Consumer confidence falls to lowest level in 3 years amid inflation fears, survey shows
Consumer sentiment in the U.S. edged down in May for a fifth straight month as Americans increasingly worry that President Trump's trade war will worsen inflation. The preliminary reading of the University of Michigan's closely watched consumer sentiment index, released Friday, declined 2.7% on a monthly basis to 50.8, the lowest reading since July 2022. Since January, sentiment has tumbled nearly 30%, a sign Americans are worried about the economy and their financial prospects, according to economists. "These survey results suggest that consumer spending may be increasingly restrained by caution under the Trump economic agenda," Carl B. Weinberg, chief economist at investor advisory firm High Frequency Economics, said in a research note. Weinberg added that the decline in confidence may cause Americans to hold back on purchasing big-ticket items until they have a clearer picture of what's happening in the economy. "Uncertainty usually foments a feeling in households that more saving is a good idea," he added. Less grim than it looks? Oliver Allen, senior U.S. economist with Pantheon Macroeconomics, noted that the U. of Michigan's initial survey likely failed to capture any improvement in sentiment from the U.S. and China agreeing to ease tariffs earlier this week. "[W]e increasingly suspect that the consumer surveys, and the Michigan survey in particular, are painting an unduly negative picture of the consumer outlook at present," Allen said in a report. "Headline retail sales eked out a further small gain in April, following a 1.7% jump in March, despite the recent plunge in confidence. Moreover, most near-real indicators of consumers' discretionary spending on services are holding up well." Trump in April slapped 145% tariffs on all imports from China, a move that effectively froze trade with the U.S.' third-largest trading partner in goods. But on Monday, the two countries said they agreed to lower U.S. tariffs to 30%, while China would cut its duties on U.S. exports to 10% from 125%. Separately, the U.S. earlier this month reached a trade deal with the United Kingdom, although trade experts said the agreement suggests high tariffs are set to remain in place for the foreseeable future. Mr. Trump on Friday said his administration will send letters that inform other nations of the tariff rates the U.S. will impose on imports. "[W]e have, at the same time, 150 countries that want to make a deal, but you're not able to see that many countries," Mr. Trump said during a Friday business roundtable between the U.S. and United Arab Emirates. Americans have largely taken a sour view about where the economy is headed in the wake of the Trump administration's imposition of huge import duties, which threaten to slow growth and push up prices. In recent weeks, the White House has pulled back on its most draconian policies, though average duties are still high by historical standards. In an April CBS News poll, 44% of Americans approved of Mr. Trump's handling of the economy, down from 51% on March 2.
1News
01-05-2025
- Business
- 1News
US economy shrinks 0.3% in first quarter
The US economy shrank at a 0.3% annual pace from January through March, the first drop in three years, as US President Donald Trump's trade wars disrupted business. First-quarter growth was slowed by a surge in imports as companies in the United States tried to bring in foreign goods before Trump imposed massive tariffs. The January-March drop in gross domestic product — the nation's output of goods and services — reversed a 2.4% gain in the last three months of 2024. Imports grew at a 41% pace, fastest since 2020, and shaved 5 percentage points off first-quarter growth. Consumer spending also slowed sharply — to 1.8% growth from 4% in October-December last year. Federal government spending plunged 5.1% in the first quarter. Forecasters surveyed by the data firm FactSet had, on average, expected the economy to eke out 0.8% growth in the first quarter, but many expected GDP to fall. Financial markets sank on the report. The Dow Jones tumbled 400 points at the opening bell shortly after the GDP numbers were released. The S&P 500 dropped 1.5% and the Nasdaq composite fell 2%. The surge in imports — fastest since 1972 outside COVID-19 economic disruptions — is likely to reverse in the second quarter, removing a weight on GDP. For that reason, Paul Ashworth of Capital Economics forecasts that April-June growth will rebound to a 2% gain. Trade deficits reduce GDP. But that's mainly a matter of mathematics. GDP is supposed to count only what's produced domestically. So imports — which the government counts as consumer spending in the GDP report when you buy, say, Swiss chocolates — have to be subtracted out to keep them from artificially inflating domestic production. And other aspects of Wednesday's GDP report suggested that the economy looked solid at the start of the year. A category within the GDP data that measures the economy's underlying strength rose at a healthy 3% annual rate from January through March, up from 2.9% in the fourth quarter of 2024. This category includes consumer spending and private investment but excludes volatile items like exports, inventories and government spending. Still, many economists say that Trump's massive import taxes — the erratic way he's rolled them out — will hurt growth in the second half of the year and that recession risks are rising. "We think the downturn of the economy will get worse in the second half of this year,'' wrote Carl Weinberg, chief economist at High Frequency Economics. "Corrosive uncertainty and higher taxes — tariffs are a tax on imports — will drag GDP growth back into the red by the end of this year." Wednesday's report also showed an increase in prices that is likely to worry the Federal Reserve which is still trying to cool inflation after a severe pandemic run-up. The Fed's favored inflation gauge – the personal consumption expenditures, or PCE, price index – rose at an annual rate of 3.6%, up from 2.4% in the fourth quarter. Excluding volatile food and energy prices, so-called core PC inflation registered 3.5%, compared with 2.6% from October-December. The central bank wants to see inflation at 2%. The first-quarter GDP numbers "highlight the bind that the Federal Reserve is in," Ryan Sweet of Oxford Economics wrote in a commentary. The Fed must weigh whether to cut interest rates to support economic growth or leave rates high because of elevated inflation. "The economy was essentially stagnant in the first three months of the year while growth in headline and core inflation accelerated, fanning concerns of stagflation." Trump inherited a solid economy that had grown steadily despite high interest rates imposed by the Fed in 2022 and 2023 to fight inflation. His erratic trade policies — including 145% tariffs on China — have paralysed businesses and threatened to raise prices and hurt consumers. Democrats were quick to blame Trump for disrupting several years of solid economic growth. Democratic Sen. Elizabeth Warren of Massachusetts said: "100 days into his presidency, Donald Trump's red-light, green-light tariffs are shrinking our economy, with businesses stockpiling imports in anticipation of tariff doomsday". There is potential evidence emerging that the solid job market, a pillar of the US economy during the pandemic recession, may be weakening. On Wednesday, payroll provider ADP reported that companies added just 62,000 jobs in April, about half of what was expected, and down from 147,000 in March. That could be a signal that businesses may be taking a more cautious approach to hiring amid uncertainty over tariffs. Still, the ADP figures often diverge from the government's jobs reports, which arrive Friday. Employers in the education and health, information technology, and business and professional services industries all cut jobs. Business and professional services include sectors such as engineering, accounting and advertising. 'Unease is the word of the day,' said Nela Richardson, chief economist at ADP. 'It can be difficult to make hiring decisions in such an environment.'
