Goldman Sachs researchers warn that the US labor market could be I'm starting to soften As private sector data shows a growing wave of layoffs in several industries, the Wall Street bank said in a new report. report.
The company said government lawsuits related to planned mass layoffs rose to the highest level since 2016 outside of the pandemic surge, the sharpest increase Goldman has tracked in nearly a decade.
Layoff announcements compiled by Challenger, Gray & Christmas, a firm that tracks corporate job cuts, rose to levels previously unseen outside of a recession by October, the report said, citing layoffs in sectors such as technology, industrial products and food and beverage as factors driving the rise.
GoldmanRussian economists said the combination of rising layoff signals was worrying as it represented “growing signs of weakness” as workers is struggling more and more provide new employment while recovering from loss of wages especially difficult.
Even some of America's largest corporations have not escaped the cooling labor market. Amazon, for example, this fall announced plans to eliminate about 14,000 corporate jobs as it seeks to streamline and implement AI.
“A sustained increase in layoffs would be particularly concerning because hiring levels are low and the unemployed find it harder than usual to find work,” economists Manuel Abecasis and Pierfrancesco Mey wrote.
Signals of layoffs on a ten-year scale
The government documents cited by Goldman — known as Worker Adjustment and Retraining Notices, or WARN notices — are required by companies with more than 100 employees before announcing layoffs. They are a useful indicator of employer behavior, signaling that layoffs may be around the corner.
In addition to the increase in WARN warnings, the bank found that management at a growing number of publicly traded companies began openly discussing potential layoffs during recent earnings calls with shareholders. Combined with Challenger employment data, this picture strongly suggests that more companies are considering downsizing and efficiency gains in the coming months.
However, the bank said weekly jobless claims remained low, meaning government reports may not yet reflect the full extent of the deterioration in the labor market. Recent Bureau of Labor Statistics Study employment report for September exceeded economists' expectations.
But Goldman noted that the claims tend to lag private layoff reports by about two months, which could indicate a potential increase in federal job loss data as the winter continues.
And while there are growing concerns about whether artificial intelligence is pushing companies to reduce staff numbersAccording to Goldman, available data does not prove that artificial intelligence is a significant reason for the latest layoffs.
“Although AI may be increasingly factored into personnel decisions,” the Goldman researchers wrote, “clear evidence of layoffs directly motivated by AI remains limited.”
