Walmart, Deloitte and Meta. These three companies are big, but they are among those whose payrolls got smaller in April.
Dozens of well-known companies have announced tens of thousands of layoffs this year as they, especially technology firms, readjust to today’s economic reality after beefing up their workforce during the COVID-19 pandemic.
Amazon, Boeing and Carvana. Disney and Dell. Alphabet and Zoom. The list of companies announcing and executing job cuts continues growing yet the number of people filing for unemployment benefits for the first time remains low. That may be explained by the newly unemployed using severance before turning to unemployment insurance. Still, the job market is losing momentum. The number of people collecting ongoing unemployment benefits in early April was at the highest level since November 2021.
The latest month jobs data will be released Friday in the week ahead. The April report will come just days after the Federal Reserve meets to discuss interest rates and is widely expected to hike borrowing rates by another quarter of a percentage point. The central bank’s sharp hikes over the past year to fight inflation have not yet resulted in a rising unemployment rate.
Striking the balance between tempering inflation while not stoking unemployment is increasingly difficult for the Fed. High profile bank failures and the subsequent credit tightening by banks further challenge the policy makers. Add the federal government’s debt limit showdown and the economic storms continue gathering.
But investor confidence remains fairly bright. The S&P 500 is up 6 percent this year. The NASDAQ, home to many of those tech companies announcing big layoffs, is up twice that. Stock investors are signaling their conviction that the Federal Reserve is just about done raising its target short-term interest rate and is likely to start cutting that rate in the fall. The bond market is predicting the first rate cut in September, according to the CME’s FedWatch Tool. But that projection can change directions as fast as a weather vane during a spring thunderstorm.
The stock market is forecasting better times ahead even as the Fed struggles to steer the economy through some deteriorating conditions.
Author’s note: This is my last column for this venue. It has been my honor to spend a little time with you each week for the past 12-plus years as we looked forward, a few days at a time, to the investment markets. I am grateful to The Miami Herald’s Jane Wooldridge for originally suggesting this column. My thanks to the editors who helped whip it into shape each week. And I am indebted to you, the reader, for spending some of your precious time with me.