JOB GROWTH SLOWS
Written by Peter Boykin on December 2, 2022
Shared By Peter Boykin – American Political Commentator / Citizen Journalist
JOB GROWTH SLOWS
Hiring slowed big time in November, missing economists’ expectations and signaling that the job market could be unraveling.
The numbers: According to payroll processing firm ADP, companies added just 127,000 jobs in November, falling short of the 200,000 gains that were expected. This is also down from the 239,000 jobs created in October.
Jobs gains came mostly in the leisure and hospitality industries, where 224,000 jobs were added.
Jobs declined in manufacturing by 100,000 jobs, in Professional and business services by 77,000 jobs, and in financial activities by 34,000 jobs.
This follows the trend we first saw in tech, which has seen 120,000 jobs lost this year, and 35,000 jobs last month alone. Tech, manufacturing, business, finance… the industries taking the biggest hits are good paying jobs that Americans can support a family on.
Job growth broken down by company size:
📉 Small businesses lost 51,000 workers
📈 Medium businesses gained 246,000 workers
📉 Large businesses lost 68,000 workers
ADP’s chief economist Nela Richardson said: “Turning points can be hard to capture in the labor market, but our data suggest that Federal Reserve tightening is having an impact on job creation and pay gains.”
And that quote brings us to our big picture…
Big picture: In an attempt to bring down out-of-control inflation, the Federal Reserve has been raising interest rates dramatically. Why does the Fed raise rates?
Because higher rates make it harder for Americans to buy things [homes, cars, appliances, food, etc].
When Americans buy less, that reduces demand for those things.
When demand is reduced, the prices stop rising.
The bigger picture: While the Fed has slowed down inflation slightly [7.7% last month vs. its 9.1% peak], the side effect is job losses. When you reduce demand, companies produce less. When companies produce less, they don’t need as many workers.
As former Trump economic advisor, Steve Cortes warns: “Any slowing of inflation only results from the material and marked downturn of the economy. Put simply: the inflation spiral may abate, but exclusively because of a brutal unfolding recession.”
[Source: Fox Business, Steve Cortes substack]
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