In this time of uncertainty, investors and companies are looking for any sign that can save them from the worst.
Inflation, at its highest level in 40 years, remains intractable.
The Federal Reserve (Fed) promised to continue to increase interest rates significantly to tame this rise in the prices of goods and services which is having a clear impact on household purchasing power.
Critics of this monetary policy are raising their voices. They believe that the central bank acted too late and now risks causing a recession in the best case scenario and deflation in the worst case.
“The last two years [are] “One of the biggest policy mistakes in the 110-year history of the Federal Reserve, by staying so easy when everything was booming,” Wharton professor Jeremy Siegel told CNBC on September 23.
“I’m so upset. It’s like a pendulum. It was so easy through 2020 and 2021, and now we’re going to be really strong guys until we crush the economy.” “I mean, that’s totally just for me, bad monetary policy would be an understatement,” Siegel criticized.
stagnation white collar
As the unknown continues, legendary investor Michael Bury, best known for betting on the sub-prime meltdown that sparked the 2008 financial crisis, continues to sound the alarm about things going wrong.
I just announced that a bubble is bursting. And this bubble is that of white-collar workers, who work behind a desk in the service sector. Suit and tie workers avoid physical labor and tend to make more money than blue collar workers. Many white-collar workers were forced to work from home when the COVID-19 pandemic broke out.
‘Mr. Big Short’ as he was nicknamed after ‘The Big Short’, who reclaimed his bet in 2015, just announced that a bubble is bursting. And this bubble is that of white-collar workers, who work behind a desk in the service sector. Suit and tie workers avoid physical labor and tend to make more money than blue collar workers. Many white-collar workers were forced to work from home when the COVID-19 pandemic broke out.
Puri said on Twitter on September 25: “The white-collar employment bubble is bursting before our eyes. The longer iteration takes to pass, the more permanent the downturn in hiring will be.”
He added that “WFH [Work from Home] In time, he will be considered guilty.”
Many economists believe that the next economic downturn will affect white-collar workers more than the blue-collar workers who were hit hard by the shutdown of the economy at the height of the pandemic.
Waves of job cuts
This expected recession in 2023 should have hints of deflation in the 1990s. This downturn was particularly devastating for white-collar workers than for blue-collar workers.
Economists say white-collar workers will be most at risk because of the place automation, via software, will occupy within companies. Additionally, jobs lost in service industries, which often employ the most white-collar workers, during the pandemic have returned to pre-pandemic levels. This means that these industries no longer have much room to expand and will therefore pay the price in the event of a recession.
“It’s mostly going to be a white-collar recession. And it won’t be in the same places we’ve seen in the past,” William Lee, chief economist at the Milken Institute, told Marketwatch in July.
He added that the demand for blue-collar workers in service and manufacturing would remain strong, which would protect them from stagnation.
“The Joe Six Pack, who used to be the first person to be laid off, could be less worried if he had one of these high-demand jobs, like Amazon warehouse worker, delivery guy, and the guy who works in the ghost kitchen.”
The tech and crypto sectors, which often hire white-collar workers, have announced waves of job cuts. Shopify (a store) Coinbase (Currency) Crypto.com, Robinhood recently announced layoffs.
Social media giant Meta Platforms (dead) and the alphabet (The Google) the parent company of Google and YouTube, is expected to cut jobs in the coming months.
Microsoft (MSFT) A spokesperson for TheStreet said in July that it was eliminating several vacancies.
Major Wall Street banks are also planning to cut savings.
Goldman Sachs plans to cut several hundred jobs this month, according to reports.
