The last time we saw a non-pandemic surge in layoffs like this was after the tech wreck in 2000-’02:
Layoffs have jumped to their highest monthly rate since 2003. (Source: Barchart)
Welcome to what efficiency consultant Robert Allen calls the Engels’ Pause: efficiency up, payrolls down.
Anticipating a sluggish labor market, the Fed has cut rates twice this fall.
Unfortunately, you can’t fix a reorganization with cheaper money. AI will eat the easy tasks first, so the pain you see — pink slips — is only half the story. Those jobs will likely never return.
Harry Dent was adamant about the second part of the story on Grey Swan Live! yesterday: New technology always leads to newer higher higher-paying jobs. Always.
The Engels’ Pause recognizes a lag between higher corporate profits and new job openings. You can expect the slow job market to raise new concerns about a deepening recession outside of AI and the stock market.
~ Addison
