As COVID-19 reshapes our economy, our newsletter will help you unpack the news from the day.
Companies announced 46% more layoffs in May than the previous month, according to outplacement firm Challenger, Gray & Christmas. Layoff announcements were concentrated in technology, retail, industrial manufacturing and auto production. Vice President Andy Challenger said job growth can be expected to slow down late in an economic expansion, as employers find it harder to hire qualified workers when unemployment is low and the labor market is tight.
Challenger said that President Donald Trump’s threat of new tariffs on imports from Mexico, plus uncertainty about whether a trade deal will be reached with China, are making employers more cautious about hiring. “Tariffs are on everybody’s mind — particularly in the industrial manufacturing and automotive sectors,” Challenger said. “Businesses hate uncertainty, they don’t know what’s going to happen. And to hire in the face of that is a difficult choice to make.”
Among U.S. economic sectors, manufacturing is suffering the most and slowing down the fastest as a result of escalating trade wars with multiple trading partners, said Joseph Brusuelas, chief economist at consulting firm RSM.
“What we’re beginning to see is a slowdown in productivity-enhancing capital investment, which has spilled over into hiring in the manufacturing sector,” Brusuelas said. “It’s an uncertainty tax on American firms,” Brusuelas said of tariffs, “that translates through to the real economy in terms of lower investment, slower hiring and a lid on wage growth.”
Brusuelas pointed out that there’s been virtually no job growth in manufacturing this year. Tariffs raise the cost of materials manufacturers import, while trade disputes threaten their export sales abroad.
If you’re a member of your local public radio station, we thank you — because your support helps those stations keep programs like Marketplace on the air. But for Marketplace to continue to grow, we need additional investment from those who care most about what we do: superfans like you.
Your donation — as little as $5 — helps us create more content that matters to you and your community, and to reach more people where they are – whether that’s radio, podcasts or online.
When you contribute directly to Marketplace, you become a partner in that mission: someone who understands that when we all get smarter, everybody wins.