Brink of recession? Atlanta Fed's GDPNow predicts zero U.S. growth in Q2
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While the U.S. is not yet in a recession, it sure seems like companies are preparing for one. Just this week, Coinbase (COIN) announced it would lay off 18% of its staff, Redfin (RDFN) said it would reduce headcount by 6% and Spotify (SPOT) disclosed yesterday that it would slow hiring by 25%. Other companies that have recently announced layoffs include Carvana (CVNA), Peloton (PTON), PayPal (PYPL) and Tesla (TSLA).
Quote: "We don't know where the labor market is headed yet," said Andrew Stettner, an unemployment expert at The Century Foundation. "But clearly many things are flashing warning signs."
Forced firings this year are likely to contrast with 2021, which has been subsequently coined "The Great Resignation." In fact, 48M people voluntarily left their jobs in 2021, marking an annual record. As layoffs take place in many industries and sectors, workers may soon feel a bigger need for job security, especially after remarks from Jerome Powell which implied the Fed would sacrifice a low unemployment number for the sake of price stability.
As mentioned previously on WSB: Several high-profile names have also issued warnings about the U.S. economy in recent weeks. JPMorgan's Jamie Dimon referred to it as a "hurricane" on the horizon, Tesla's Elon Musk said he had a "super bad feeling" and BlackRock's Larry Fink predicted that the spikes in inflation will last for years. The OECD and World Bank have also slashed their GDP growth estimates, citing vulnerabilities and persistent supply side disturbances that were preceded by a protracted period of highly accommodative monetary policy.