The Washington Post is reporting that big businesses are pulling back on hiring due to uncertainty about the economy (see below).
Still no mention by the national media that small businesses have already been shedding jobs for the last 3 months.
— U.S. businesses have begun taking down job listings because of the uncertainty caused by the trade war: “Win Cramer had big plans to hire several new employees this summer for his company, including a chief operating officer, but he took the job listings down after Trump tweeted that more tariffs would hit Chinese goods in September,” our economics correspondent Heather Long reported yesterday. “‘It’s the most frustrating time I’ve ever had running a business, and I’ve been doing this for 20 years,’ said Cramer, chief executive of JLab Audio, which makes wireless earbuds and headphones sold at Best Buy, Target and elsewhere.
“The United States had 7.3 million job openings in June, down from a peak of 7.6 million in November. … While the decline is modest, economists are concerned hiring could dry up quickly as companies see no end in sight to Trump’s trade war and they look to cut costs. The reduction in job openings is also widespread across many industries, signaling how cautious companies are becoming. A decrease in job openings has tended to be a signal of economic trouble. … Job openings peaked in April 2007, for example, nine months before the start of the Great Recession. Job openings in many industries have declined since November, including the information sector, financial services, transportation and warehousing, and hotels and food service, suggesting wide concern about future growth. Actual hires also have slowed this year, with average monthly job gains falling to 165,000 a month, down from 223,000 a month last year.”
— “Uncertainty” is the buzzword that keeps coming up in notes from Wall Street institutions to their clients that seem to become gloomier with each passing day:
“Trade’s simmer has begun to boil, business sentiment and capital spending have softened further, global growth remains weak and inflation expectations have fallen,” Morgan Stanley’s Ellen Zentner wrote on Monday. “Heightened market volatility and increased news flow on trade may soften consumer sentiment and spending.”
Goldman Sachs said Sunday it does not expect a trade deal between the U.S. and China before the 2020 election. “Fears that the trade war will trigger a recession are growing,” wrote Goldman’s chief U.S. economist, Jan Hatzius, explaining why growth projections are being lowered. “Overall, we have increased our estimate of the growth impact of the trade war. The drivers of this modest change are that we now include an estimate of the sentiment and uncertainty effects … Relatedly, the business sentiment effect of increased pessimism about the outlook from trade war news may lead ﬁrms to invest, hire, or produce less.”
“We are worried,” Bank of America Merrill Lynch chief economist Michelle Meyer wrote Friday. “We now have a number of early indicators starting to signal heightened risk of recession. Our official model has the probability of a recession over the next 12 months only pegged at about 20 percent, but our subjective call based on the slew of data and events leads us to believe it is closer to a 1-in-3 chance. … Three out of the five economic indicators (auto sales, industrial production, and aggregate hours worked) which track the business cycle closely are near levels consistent at the start of the previous recessions.”