THE UNITED STATES LABOR RECESSION STARTED ON 9/8/23 AND IS 15 MONTHS ALONG AND COUNTING. The country also remains in a housing recession and manufacturing recession but an overall US recession continues vacationing with Godot. 2024 is the Year of the Godot Recession (it has not shown-up yet).
The US economy used to be dominated by the housing and auto sectors. When they go into recession, the whole country would drop into recession. 100 years ago, the railroads ruled the roost. Housing and autos/manufacturing are now second tier players in the recession prediction game. Semiconductors are the new sheriff in town and the chips are now the dominant influence on the stock market and economy. Think about it. Nearly every product you buy nowadays has a chip in it.
Despite the lousy labor, housing and manufacturing industries, the Godot Recession occurs (the recession has not yet arrived). This is because semi's now rule the roost and are the most important metric. The AI hype has only served to bolster this top-spot, king-of-the-hill position. In addition to the chips holding up the markets and economy, so are the wealthy class that have benefited greatly due to the last 15 years of Federal Reserve money-printing.
The top 20% of Americans, the have's, made filthy rich by the Federal Reserve's obscene money-printing that sends asset and stock market prices higher, account for 50% of the consumer spending in the United States nowadays. The other 80% of have-not's account for the other half of spending and they are not buying another vacation home, or yacht, or rare diamond bracelet, or brand new Mercedes convertible.
One-half of Americans do not own one single share of stock and did not make millions effortlessly via the Fed's money-printing. It is crony capitalism filth. Be glad it is in its last throes. The have-not American peons are buying food, diapers, baby formula, and necessities; consumer staples. They wonder how they will pay rent or the mortgage with the car and home insurance rates going through the roof. They are exhausted from working two jobs and watching their savings vanish as they listen to the upper classes brag about their new cars, clothes, jewelry and homes, courtesy of the Fed of course.
So 2024 is a tale of the have's and have-not's. Even the wealthy cannot spend limitless. They only need one $15,000 freezer, $2,000 wine rack and $40,000 cement driveway. After that it is time to kick back and enjoy life.
The unemployment rate increases on Friday, 12/6/24, from 4.1% to 4.2%. The 8/2/24 jobs number was 4.253% rounded up to 4.3% while the 9/6/24 number is 4.221% rounded down to 4.2%. The 10/4/24 number was 4.1%.
The low prints were a 3.4% rate in February 2023 and May 2023 precursors to the start of the labor recession, and rising unemployment rate, in September 2023. The US unemployment rate is now 0.8% to 0.9% above the lows last year almost one whole percentage point; not good.
The blue line is diverging up and away from the red line which means trouble ahead and it is time to watch your wallet. Over the coming weeks and months, some of you will be called into the boss's office that will tell you to clear your desk drawers, pack up your family pictures, house plant that needs watered, and change for the coffee machine, and get the Hell out. Oh yeah, hand in your badge and door card since you are no longer allowed in the building. Now get out. Beat it.
Young adults under 40 years old will learn a lot about yourselves and the people around you as the country slides into recession. You lived through the pandemic recession but that was an oddball animal in its own right. In an economic recession, you or your significant other will likely lose your job, maybe both of you, so obviously you should already be planning for such an outcome. Also understand, that if you think it is easy to get another job now and you are not worried, you are living a false reality. In a recession, hundreds of other folks will now want the same available job and the guy that told you to call him anytime you wanted to work for him now does not even take your phone calls.
For the next Jobs Report on 1/10/25, the unemployment rate, now at 4.2%, can be 4.0% or higher for the US labor recession to continue. The rate would need to drop to 3.9% or lower to nullify the labor recession indicator after 15-plus months and instead point towards a labor recovery and steadier growth pattern ahead. With the rate at 4.2% now, remaining in an uptrend, it is hard to imagine that a 3.9% print will occur in 4 weeks; it is very unlikely. It is easier to envision the rate remaining above 4% going forward and actually expanding higher back to the 4.3% and higher. The unemployment rate for blacks is up to 6.4% and the U-6 rate increases to 7.8%.
Keystone will educate you a little bit on Management 101. Layoffs. Decades ago, you could get sh*t-canned from your job a few days before Thanksgiving but companies started receiving cold-heart reputations so managers got smarter. Typically, if you need to trim the herd, you will layoff employees before Halloween, October 31, because then you will not get accused of throwing families out into the street during the holidays. Thus, if you are still employed after Halloween, your boss likely plans to keep you around until the new year.
However, January is round two. After the holiday fun is over, many companies begin new budgets in January and guess what? You are persona non grata. You are on the layoff list and get sh*t-canned in mid-January as the company charts the new year forward. Thus, continuing the discussion above, it is more likely that the unemployment rate will move higher since some folks, maybe you, are going to get sh*t-canned from your job a month from now. You will plead with the boss stating that he/she told you last week that the company cannot survive without you. The boss will laugh and say you dumbsh*t, we tell all employees that to get more work out of you; now pack your bags and get out.
The tech and semiconductor stocks are likely topping-out as the initial AI hype wears thin. The rich are still spending money but that should lessen going forward. Holiday spending is important since it is propping-up the economy. The weakness in the chip sector going forward, and the wealthy folks tightening-up their spending, will join the ongoing labor, housing and manufacturing recessions, to finally welcome Godot that will arrive with the overall US recession. Happy New Year.
Note Added Friday, 1/10/25: The unemployment rate drops to 4.1% from 4.2%. The labor recession is now 16 months along. The 2/7/25 Jobs Report is far more important than today's report since it will begin reflecting layoffs. Remember Keystone's Management 101 lesson above. If you are a worker and made it into November into Thanksgiving, a company will keep your sorry arse around until the first of the year. That party is over. Today there were likely management meetings at nearly every US company. Department managers bring their layoff lists to the executive conference room and they decide who is on the chopping block first. Boss's will begin calling employees to their office on Monday to sh*t-can them. Now through the end of the month will likely be a lot of layoffs as companies set sights on a healthy year ahead. Now it is time to cut dead weight, like that Keystone character that keeps making trouble. If your company does not have much of a backlog of work, and you have been doing some administrative tasks, charging your time to overhead, you will be laid-off in the days ahead. But Keystone, you told me I was the best employee here and the place could not survive without me. Managers tell all workers that same thing to get more work out of you, you are dumber than I thought, now get an empty cardboard box from the copy room, and pack up your potted plant that needs watered, and your family photos especially that one with your family on the beach last summer, and your change for the coffee machine in the top desk drawer, and get the hell out. And give your door key card to Betty on the way out. For the 2/7/25 Jobs Report, the labor recession will continue if the unemployment rate is 4.0% or higher but the labor recession will end if the rate drops to 3.9% or lower.
Note Added Tuesday, 1/14/25: Meta announces plans to cut 5% of its workforce. Some analysts put the number at 3.600 employees that are sent packing. The fired workers can moan and complain about losing their jobs on Facebook, Instagram and WhatsApp (Meta platforms). It is January and time for layoffs; time to trim that dead wood. Now take your Tupperware from the refrigerator in the breakroom, your graduation certificate from a self-improvement class that is hanging on your cubicle wall, and your mug that sports the company logo (the company that is now sh*t-canning you), and get the hell out. And do not forget to give your door key to Betty on the way out. After today, you are not permitted inside the building again. It was good working with you, now get the hell out. Brown-Forman, the bigtime whiskey and spirits maker, cans 12% of its workforce. Do not let the door hit you on the way out and here is a complimentary bottle of whiskey to drown your troubles and water down the worry of losing your job, albeit only for a few hours. Media company Alamo Drafthouse fires workers. Microsoft announces plans to layoff thousands of workers. Amazon and Washington Post are sh*t-canning employees. Happy New Year. BlackRock is laying off workers. It is January and the smell of layoffs is in the air. Wayfair, Pandion and Icon say adios to employees that will now seek unemployment compensation. Aqua Security, Altruist, SolarEdge and Level call workers in on the carpet telling them that their services are no longer required. What will these folks say to their spouses and children when they get home and have nowhere to go tomorrow morning? How will they explain that they lost their job? Will they feel like they let their spouse and children down? It starts to sink in that you lost your job and then worry begins about how you will find another. The mind races imagining negative thoughts and outcomes. A lot of you young folks under 40 years old are going to learn a lot about yourself, your loved ones, and others around you, over the next couple years. Keep your head down if you work in the office because the boss is dressed in a black robe, carrying a scythe, walking up and down the hallways. If you walk around the office, always carry a piece of paper because it makes you look like you are doing something. Years ago, Keystone would walk around with a blank sheet of paper in his hand, stopping at peoples offices to bull-sh*t and goof-off all the time, and when he walked down the hall everyone automatically thought he was busy because he was carrying some type of document. Do what you can to look busy, and make sure your time card is all billable hours if in that type of business, because the managers are revising their layoff lists daily. Anyone working and charging time to overhead will be canned. If you make money for the company, they will keep you around.
Note Added Wednesday, 1/15/25: Oil giant BP announces plans to cut thousands of permanent and contractor jobs. Clear your desk and get out within 15 minutes, otherwise, security will escort you out. Oh, yeah, thanks for your service, we will call you if we get busy again, now get the hell out, your job is over. Spirit Airlines pushes 200 employees out of a moving airplane telling them their positions are eliminated. Don't you feel foolish that you got down on your knees in front of your boss to accept the mandatory mRNA COVID-19 vaccine injection into your body to keep your job, and now the airlines dropkick you across the tarmac into the dumpster.
Note Added Thursday, 1/16/25: Amazon cuts 200 heads at its North American sales unit. That must have been a bunch of dead weight. Don't let the door hit you in the arse on on the way out.
Note Added Friday, 1/17/25: Banking giant Citigroup is cutting more jobs to reduce operating expenses. The firings of managing directors and data analysts are part of a bigger goal to eliminate 20,000 jobs by 2026. 23% of Harvard MBA graduates, 1 in 4, cannot find jobs. Other colleges report similar placement data. Graduates that are finding positions are tempering their expectations. Why does everyone keep saying that the labor market is hunky-dory?
Note Added Thursday, 1/23/25: CNN media is laying off hundreds of employees now that the holidays and inauguration are over. NBC follows CNN's lead and says it is also trimming employees. It is time to call your wife or husband and tell them that you lost your job. Now pack up your family pictures and half-dead houseplant from your cubicle, and get the hell out. Oh yeah, thanks for your hard work over the years. Now Beat It.
Note Added Sunday, 1/26/25: Bridgestone announces plans to close is tire plant in Tennessee this year sending 700 workers down the road. Bridgestone has canned 200 employees over the last 2 years. The loss of an anchor plant destroys a community since the support jobs disappear. Once the anchor plant is gone, the doughnut shop will cut its staff and maybe close shop. Ditto the local eating establishments, the copy place, daycare facilities, convenience store, etc... A Bridgestone worker is given a pink slip and begins the long and lonely drive home where he will have to tell his wife about losing his job, making him feel like a failure and that he has let her and the family down (through no fault of his own), but he gets a flat tire and has to pull off on the side of the road. When it rains, it pours. Tires are a vital industry and key economic indicator. Less need for tires means less cars will be manufactured and sold as well as farm and construction machinery. That means the economy is becoming sick and job losses would be expected. Retail jobs may be leaking lower especially after the holiday season. Retailers fall short of the hiring plans proclaimed in September and October. Bankrupt retailers account for many of the job losses over the last two years but mainstream big-box retailers such as Walmart, Target, Costco and Macy's are now canning workers. It is January so companies are trimming the dead meat. About 120K retail jobs were lost in 2023 and about 170K were lost last year.
Note Added Thursday, 1/30/25: Amazon cuts into the bone eliminating corporate positions. Take your coffee mug and Hit the Road Jack, and don't come back no more. Duck Donuts, that operates 100 chain stores, announces layoffs. If there are not as many doughnuts needed each morning, that means there is less people commuting to work. Retailer Kohl's cuts corporate jobs. Are you noticing a theme? Companies are cutting out middle and upper managers viewed as dead weight. Others will have to pick up that load and carry it, and do not complain, otherwise, your arse will be thrown out onto the pavement next. Starbucks is preparing a layoff list and will start axing bodies in 4 weeks. Bloomberg reports that Wall Street may lose 200,000 jobs over the next few years due to AI (artificial intelligence). Microsoft echoes Bloomberg's words saying that AI will lead to many job losses.
Note Added Friday, 1/31/25: St Micro plans to cut 3,000 employees worldwide mainly in Italy and France. Germany remains in recession and it is supposed to be the economic engine of Europe. The US is trying to hold up all the drunks in the world. How long will that last?
Note Added Tuesday, 2/4/25: Salesforce cans 1,000 workers but is hiring AI employees. One thousand people realize that their job was not as important as they thought or as they bragged about on Facebook. A pink slip clears the mind. Now fill out your last timecard and get the Hell out, and take your half-dead houseplant with you. The boss says your cubicle is needed for a future AI worker. Your coding skills are old-hat and outdated replaced by AI after everyone told you to go into coding 4 years ago. Now they are telling you to go to Starbucks and learn how to pour a cafe latte. The US JOLTS Report lays an egg reporting 7.60 million openings missing the 8.01 million expected and below the previous 8.16 million job openings. Considering that a 5 to 6 million base always exists in that data that represents unserious jobs and other corporate games to meet EO laws, the report is actually telling you that there are only about 2 million job openings available in the US currently.
Note Added Thursday, 2/6/25: Workday cuts 1,750 jobs. The ADP jobs data is a beat at 183K jobs versus the 150K expected, however, manufacturing jobs are lost. The California wildfires and other natural disaster clean-ups may be boosting the jobs number. The US Monthly Jobs Report drops tomorrow morning so an update on the unemployment rate will be on tap. The rate is at 4.1% and can be 4.0% or higher to continue the labor recession as per the chart above. An unemployment rate of 3.9% and lower is needed to stop the labor recession but this number is not expected. Typically, once the rate bumps higher, it then explodes higher signaling a widespread economic recession coming fast, but that has not happened yet. Maybe tomorrow?.
Note Added Friday Evening, 2/7/25, at 6:17 PM EST: The retail sector is hit with job losses. Over 100 Volcom, Billabong and Quicksilver stores will be shuttered as parent company Liberated Brands files for Chapter 11 bankruptcy. The Jobs Report is a 4.0% unemployment rate so that sets up a showdown for the 3/7/25 number. If the rate drops to 3.9%, the labor recession will end. If the rate is 4.0% or higher on 3/7/25, the labor recession will continue. The overall Godot Recession (it has not shown up) continues in the United States even though housing, manufacturing and labor are in recession. The overall recession is avoided as consumer spending remains healthy. The spending remains robust due to the upper middle class and wealthy elite made filthy rich during the last 15 years off Federal Reserve money printing while the middle class was gutted into nothingness, the millions of migrants that entered the country over the last 5 years, wealthy parents supporting deadbeat children, the AI orgy driving bullish euphoria and optimism, and economic weakness and war around the world chasing investors and money into the United States the perceived safe bet. You would think a lot of the layoffs above in January/February, as expected, would filter into the job numbers. We will know on 3/7/25.
Note Added Wednesday, 2/12/25: META begins layoffs that plan to cull 5% of the workforce. Deadbeats and slackers are running for their lives. Facebook employees follow Zuck around taking turns kissing his *ss.
Note Added Thursday, 2/13/25: Chevron, the oil behemoth, plans to cut 20% or workers to increase efficiency. In other words, management cuts 1 in 5 employees and the remaining workers are told to pick up the slack, otherwise, they are next on the chopping block. Joann Fabric, the arts and crafts supplier, is shuttering 500 stores. Americans that work multiple jobs to make ends meet, or seniors that have to continue working late in life, work a few hours a week at places like Joann Fabric. Not anymore.
Note Added Friday, 2/14/25, Valentine's Day: Blue Origin, Bezos's space company, plans on cutting thousands of workers. HSBC, the banking giant, announces more job cuts. Walgreens is exiting California shuttering its drug stores citing high crime, high taxes and high labor costs as too difficult an environment to do business. Federal workers are culled as Elon Musk, an unelected bureaucrat, with the blessing of King Donnie, deletes entire agencies from the US government. Thousands of government workers are tossed out on their ears; it is a bloodbath. Some employees are told to get out of the building within 30 minutes. The copy room does not have enough empty boxes for all the employees receiving pink slips. They need something to carry their books and papers, house plant that needs watered, wall hangings, certificates and plaques, framed pictures especially the fun family beach photo from a few months ago, and change for the coffee machine. Maybe a black plastic trash bag will be able to carry your wares. The cubicle that was so important for a few years will never be seen again. Neither will the coworkers that stabbed you in the back to save their jobs. Now take your cubicle tchotchkes and get the Hell out. Good luck in life. It is a St Valentine's Day massacre.
Note Added Sunday, 2/16/25: President Trump is axing tens of thousands of government employees. 10% and more of the employees at the CDC are fired. Donnie the dolt and Elon the twit fired a bunch of nuclear-related employees that they are now desperately trying to find to hire them back. Make sure the two jackasses give you a raise if you go back to work at the Donnie and Elon carnival show. Other government employees are receiving threatening letters to quit or they will be fired. Do not quit your job. Let the *ssholes fire you because you will still be able to collect unemployment plus you can get yourself a labor attorney that will get a lot more money when you sue them over the threatening documentation and unlawful termination. If you are over 50 years old, it gets better. Obviously, you are discriminated against and terminated from your job because of your age. Donnie and Elonnie will have to pay for their age discrimination they committed against you. With such a massive job displacement occurring, it will be interesting to see if the house prices plummet in Virginia as tens of thousands of homes go up for sale. All the job cuts listed above by many companies and the government have done nothing to move the BLS job numbers. Will the massive firings in government finally move the needle for the unemployment statistics?.
Note Added Monday, 2/17/25: Southwest Airlines cuts 15% of its corporate workforce. This is the dead weight that sits around an office, or worse, lies around at home, that can be axed and no one will even notice. The airlines needs hands-on pilots, traffic controllers, attendants, mechanics and support personnel not coffee mug holders and sports pontificators sitting on leather chairs around a conference table at he headquarters. Get out. President Donnie Trump begins slashing FAA air traffic control staff which is odd since there have been several airplane crashes, with dead bodies, over the last few weeks. Hours ago, an airplane crashes on landing at Toronto's airport. 80 people survive as the aircraft loses a wing and flips upside down on the icy, snowy, and windy runway. Donnie and Elonnie better know what they are cutting in government; it would be a shame if they trimmed people and then an accident occurs because of the decisions.
Note Added Thursday, 2/20/25: United Health tells employees to take an exit package, otherwise, layoffs are next. Donnie Trump wants to slash the Pentagon budget so the tech and AI darlings, that feed off the government teat, such as Palantir, are dumped in the stock market and this activity will obviously lead to job losses in the public and private sectors. Marvel cans employees despite the success of their popular video games. The game industry in general is trimming the dead weight. Companies want to begin the year leaner and meaner so there are people being pushed out the door across the United States. The kiss-*sses that brown-nose the boss all day long always keep their jobs until the end, but they lose their self-respect along the way.
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