Layoffs
With economists and experts in arguments over the health of the economy, many do believe there is one inevitability that is slowly hitting numerous businesses today: layoffs.
With unemployment reaching 50-year lows but GDP declining over two consecutive quarters, it can be hard to decipher what is really happening within our current economic climate. Corporations on the other hand are taking special measures that point to them bracing for a near recession. Layoffs are a common measure taken by businesses to decrease their overall spending and to save some money.
Yesterday, GAP released they are cutting close to 500 corporate jobs in a bid to cut down their spending. They explained that their operating costs began to grow faster than their sales, and to stay profitable, they were forced to eliminate a number of positions with the company. With corporations obligated to post their earnings soon, growing demand and sales issues may force them to follow suit. Specifically, in the retail industry, other companies such as Walmart and Stitch Fix did the same in recent weeks.
Nevertheless, the growing probability of a recession will bring forth layoffs and growing unemployment levels, but they are a natural part of an economic cycle that has lasted over a century in the US.
I am not a financial advisor and my comments should never be taken as financial advice. Investments come with risk, so always do your research and analysis beforehand.