Layoffs are coming

Friday, May 6, 2022 12:51 AM
While everyone is talking about inflation, there is another important economic measure flashing severe danger. The Bureau of Labor Statistics just announced that output, what was created, dropped 2.4 percent, yet labor hours used to create those outputs increased 5.5 percent. This creates a productivity drop of 7.5% for the overall business. The largest quarterly drop in productivity since 1947. This sudden and severe drop in productivity, caused by price inflation and a resulting drop in demand, is going to force large businesses to reduce their workforce. This is a repeat of the stagflation from the 1970s. Government spending and debt leads to inflation, which reduces demand, which leads to layoffs, which further reduces demand, and so on.

29 comments

awesome I hope I will get some more stimulus checks and unemployment since I am so jealous of all the boomers.
49-Cowboy
2 years ago
So basically they'll lay people off to maintain profit margins. Greed . It'll happen
Icee Loco (asshole)
2 years ago
Turbulent times coming. Need to fix our broken economic system and go to UBI, Strong Public Housing Offering, Medicare for All, Free College with dept forgivness. As a start, pass Biden's Build Back Better Budget. SJG Gaby [view link] The Rolling Stones - Gimme Shelter - 2013 School of Rock AllStars Team 4 [view link]
san_jose_guy
2 years ago
Those unemployment and stimulus checks are a big part of why we are in this mess. The government spent trillions it didn’t have, which lead to historic inflation. So, sure, I wouldn’t be surprised if the corrupt morons in Washington tried again to spend our way out of inflation. If so, our current economic mess will seem like a picnic.
mark94
2 years ago
^ Сан-Хосе ползучести San-Khose polzuchesti
TheeOSU
2 years ago
^ Meant for the creep
TheeOSU
2 years ago
There is only one way to stop the death spiral of stagflation. Control government spending and raise interest rates until they are higher than inflation. If we do that, as was done in the early 1980s, it will take a year or two to work our way out of it. Interest rates are currently at 2% while inflation is at 8%. Meanwhile, Biden is proposing spending trillions more. So, no, I don’t see things improving anytime soon.
mark94
2 years ago
Politico poll conducted After SCOTUS Roe w Wade decision leak: Top Issues for Democrats: 1. The Economy 31% 2. National Security 16% 3. Abortion 14% Top Issues for Republicans 1. The Economy 47% 2. National Security 27% 3. Medicare and Social Security 9%
mark94
2 years ago
That’s a great idea SJG! Now who is going to pay for all of that? Are you? Do you even pay taxes or is your organization tax exempt? Personally I work in sales, and I saw this coming since last summer. Certainly are odd times, interest rates are going to skyrocket but housing is still hard to come by. Up until now I felt like I could do anything. Find a new job when ever I wanted, take out a loan with little worries, spend freely, but now I am cautious for the time being, who knows what will happen over the next few years. Inflation, possibility of more international conflicts, supply issues / shortages. It good times no matter what country you live in.
shailynn
2 years ago
The n solution is price controls and crack down on price gouging. Lower rents. Increase the minimum wage. Put businessmen who refuse to follow the law on trial for economic terrorism against the people. Raise taxes on the rich
Icee Loco (asshole)
2 years ago
Adding to the OP; 1st-quarter GDP was -1.4% Seems most signs are leading to very tough times ahead and my worry is the Brandon administration's focus is "white supremacy", correct-pronouns, the environment (we're gonna die soon if we don't spend trillions ASAP), and the "disinformation bureau" - rigged-elections have consequences; we've put in power people that just care about being in power the country be damned.
Papi_Chulo
2 years ago
"... This is a repeat of the stagflation from the 1970s ..." Seems the Fed will have to choose b/w taming inflation or letting the economy/markets blow-up - many are saying that sooner than later the Fed is gonna be forced to give-up the inflation "fight" and come to the rescue of the economy/market by adding/restarting more QE, and stopping or backtracking on interests-hikes - causing inflation to not be "tamed". Some are saying the Fed may actually want the high-inflation as the only somewhat plausible way of dealing w/ the astronomical national-debt (inflate the debt away).
Papi_Chulo
2 years ago
Price controls have been tried, and failed, before. Rent control is a perfect example. If you put limits on rents, the number of available rentals declines. No investor/developer is going to build rentals if they can’t make money. So, for the very few who live in rent control, it’s a good deal. For the vast majority who aren’t in rent control, their only alternative is either to buy an expensive home or move out of the community.
mark94
2 years ago
Another thing that has gotten little attention is what higher rates mean to the government’s ability to finance the national debt. Something like a trillion dollars a year will be needed. Fire up the printing presses.
mark94
2 years ago
Icee the fucking communist scumbag low life liked his own post Good one little girl. Get a job you lazy fuck. Jimmy Carterbidenrottenchildren is the problem.
skibum609
2 years ago
The problem is you're looking at it from the perspective of those trying to profiteer off the crisis and what's best for their profits.
Icee Loco (asshole)
2 years ago
How about our fucking so called leader that inflated this crisis and will continue to do so dougie? You used to be the finance/investing expert until you lowered yourself to your icey level!
TheeOSU
2 years ago
Can't wait to hear SJGs response but guess I'll have to wait until tomorrow afternoon when the library opens.
shailynn
2 years ago
Recessions in the future will only matter if you slacked off in school. Remote works means no more "how far do you live from the office" talk. The smart will find new work with labor shifts and the dumb will be happy to get 6 months off from work again
NJBalla
2 years ago
By November, abortion will no longer be an issue. The law won’t change in NY, California, or other blue states. Democrats will wonder why everyone got so worried about it in May. The abortion laws might change in Alabama or Texas but there aren’t a lot of Democrat activists in those states.
mark94
2 years ago
I will never have to worry about abortion because nobody will have sex with me.
49-Cowboy
2 years ago
“but now I am cautious for the time being” That’s another cause of recessions. The fear of a recession causes people to stop spending and build an emergency fund. That crushes demand for goods and services, leading to recession.
mark94
2 years ago
For Every Unemployed Person, 2 Jobs Are Available [view link] Not saying I agree with this article, just reporting the news.
shailynn
2 years ago
Will a recession see more woman turn to stripping to make ends meet or will it drive customers away for lack of money?
shadowcat
2 years ago
^^ Rickyboy Dugan loves recessions fir smoke otc opportunities!
Mate27
2 years ago
In some areas, a significant portion of the strip club customer base is a flash and sizzle crowd. People who live on the edge and spend more on cars, houses, vacations, and strip clubs than they can afford. During tough economic times, these customers disappear. In places like Southern California and Las Vegas, this could be significant.
mark94
2 years ago
For the last 10 years, tech growth stocks have dominated the market. These are companies that had huge revenue growth but never really made any profits. People piled into the stocks believing that the companies would eventually make big profits. Now, with inflation and recession looming, investors are selling these stocks and shifting to boring, stable companies with modest growth but actual profits. We are beginning to see layoffs at these tech companies. I expect a bloodbath at Twitter once Elon is in charge.
mark94
2 years ago
^ Google (Alphabet) and Apple did just fine, despite the recent pullback, plenty of real profits, Tesla I agree is overpriced and over valued, yet Musk continues to fund his pet projects, Space X and now Twitter, and Microsoft has made some real money as well, I don't know how this will end up, but my guess is a year or two from now the Dow will be over 50,000 the S & P and the NASDAQ will be flying high as well.
twentyfive
2 years ago
I wasn't clubbing much during the Great Recession, only because I was in a new position with early mornings and 1005 field work. By the end of the day I was too dusty and grimy to try and visit a SC. Also, it was New Orleans, so the hotties only worked nights and it was a low-mileage area. So I cannot speak from direct experience, BUT I had read articles how the brothels in NV and the strippers in Vegas were struggling big-time to earn since no one was spending. It didn't help that we had a commie for president who had no understanding of economics, but kept comparing the federal budget to losing the family mortgage in Las Vegas. In places where the club's base is lonely old men and pensioners whose income would not be affected by unemployment and layoffs, the dancers probably don't lose much (South Florida). However, in tech-heavy cities (Phoenix) and tourism-dependent economies (Vegas) I could see how they would really feel a pinch when layoffs roll out.
gammanu95
2 years ago
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