Author: Steve Tee
More layoffs incoming as economical outlook is not looking good, whilst mounting pressure from Federal Reserve of a potential 50 basis rate hike during the next FOMC announcement. It seems like the jobs data that was released recently, is somewhat misleading. Think about it, if the employment is robust, why are MNCs laying off? This is weird. Coming in this week leading the layoff scoreboard, McKinsey & Co cuts 2,000 jobs and this is their largest layoff as reported by Bloomberg News. Over at the crypto world, Polygon will be laying off 20% of its workforce as means of restructuring, reported by The Economic Times. Hewlett Packard is shrinking its staffing so aggressively that its employees in Israel will be affected too after announcing 4,000 – 6,000 job cuts, as reported by Business Today.
So many layoffs going and some say the job market is resilient. This is mysterious in every sense. Credit is getting more expensive and business are suffering from cash shortage, consumer debt (especially credit card debt) is climbing higher by the day, delinquencies in auto loan and housing loan is turning from bad to worse, and inflation is still sitting high above 6%. When March comes, oil prices will likely spike due to shortage of supply.
Reuters reported that yesterday Wall Street posted its worse down day since December 15 2022. Jerome Powell’s rate hike demeanor is spooking investors worldwide, accompanied with US national debt at such critical level. The indices are down respectively Dow 2.06%, S&P 2% and Nasdaq 2.5%. A whisper from an inner voice suggest that Federal Reserve may, pivot soon. How soon? That will be the million-dollar question. But Mr. Powell seem to just focus his attention onto the job market and other factors do not bother him much. This means that as long as the job market is strong and resilient, economy is good and he can hike interest rates. Very myopic indeed.
Wouldn’t it be convenient for Jerome Powell that if the employment data always shows resilience, it will give him the implied green light to hike rates? Even though with just taking an uneducated guess, the employment data is rigged and manipulated? Nobody knows right. What you see is what you believe, correct? What is reported by mainstream media, is suppose to be correct and trustworthy, isn’t it? …..Or is it?