Reconciling Layoffs With a Booming Economy
Estimated reading time: 3 minutes
Layoffs can be hard to stomach. And during a time that the economy is booming, they’re even harder to reconcile with what economic data seems to be telling us. Let’s break down this disconnect.
Various Fortune 500 companies, including UPS (UPS), eBay (EBAY), and Microsoft (MSFT), have announced mass layoffs recently. But they largely seem to reflect a strategic rebalancing of companies’ workforces, rather than a broad labor market downturn. This rebalancing is occurring as employers are adjusting following the 2021 hiring spree.
The data supports this point of view: The layoff and discharge rate across the broader labor market remains low by historic standards, according to the Bureau of Labor Statistics.
Industries like tech and media, often in the spotlight for layoffs, had a layoff rate of 0.8% in December, a small decline from the month prior. In comparison, construction is currently experiencing the highest layoff rate at 2.1%. The overall rate for December was 1%, for the fourth month in a row. In fact, the monthly layoff rate has only moved above its pre-pandemic low once in the past three years.
Even so, layoffs can leave workers in financial turmoil. Here are tips on how to better weather the storm.
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