More layoffs hit the U.S. job market as Walmart cuts corporate employees
Yahoo Finance Live anchors discuss the latest initial jobless claims numbers, along with Walmart laying off 200 corporate employees.
Video Transcript
- But first, here are three things you need to know right now. We've got the latest initial jobless claims this morning, coming in a little bit higher, week over week. That, of course, comes before tomorrow, is key, jobs report.
And Julie, look, we're still looking for cues or clues on the jobs market. And really, the only thing we have besides jobless claims is all these announcements by companies announcing layoffs.
And that is clearly picking up. But no real major red flag in this claims data.
- Yeah, no major red flags. So we have a number of different clues. Right? We have individual companies. We have jobless claims data, which is bang in line with estimates, but to your point, ticking up very slightly, week over week.
And then we have other stuff. Right? We have the JOLTS data, the job openings data, that came in earlier in the week. We also had some data today from Challenger Gray and Christmas, which measures job cuts.
So job cuts ticking to 36.3% in the month of July. So that's another kind of indication, those job cuts rising by that amount.
But still, by most measures, the labor market remains tight, even though we are seeing some percolating signs of perhaps some slack coming back in.
- And the latest percolation is Walmart. Walmart announced yesterday, after the close, 200 corporate workers are leaving. And I had a chance to catch up with a spokesperson over at Walmart. So 200 positions, corporate focused.
They're telling me not much more to read into it other than looking to get perhaps a little bit leaner. No indications of store closures coming, not end of the world type stuff. But still, this of course, comes after that Walmart profit warning just a few weeks ago.
So when you see the world's largest retailer which is sitting on billions of cash trying to get leaner at its corporate office, not exactly a great sign.
And here's a good chart from Bank of America. Senior Editor Myles Udland tweeted this out a couple of days ago. You can see the layoff announcements starting to pick up in corporate America.
Now, it's not back to that 2006 or a great financial crisis level. But it is starting to pick up. And it's unclear, obviously, if it goes back to those levels.
- Yes. It is unclear if it goes back to those levels. And to put things in perspective, 200 jobs at Walmart. Walmart employs 2.3 million people.
- Yes. That's correct. Yes.
- And I don't know how many of those people are in corporate Walmart, but even so.
- These are all corporate.
- Right, but I don't know how many, like what percentage of their corporate office this would represent, for example. 2.3 million, most of those folks are at stores and in other operations.
But in any case, we are starting to see these anecdotal examples. And our Jen Schonberger talked to Larry Summers, former economic advisor to the White House, of course, someone who warned about inflation before it came. And now his latest warning is about employment. Listen to what he said.
LARRY SUMMERS: I think that if the economy gets into a situation where unemployment rises, unemployment is likely to rise quite substantially. And so I would expect, sometime within the next two or three years, that the unemployment rate would cross 6%.
- 6%, big scary number. Of course, Summers was correct about inflation. But there is some debate about how severe unemployment is eventually going to get.
And the reason is because of something called labor hoarding. I don't know if you've heard much about this. And this is something we've talked about before, maybe not by that name.
But the idea that if we are going to get a relatively mild recession, a shallow and brief recession by historical standards, that companies who have had such a hard time finding people to fill jobs over the past couple of years will hold on to those people in the anticipation that activity will quickly pick back up.
Now, they might cut back hours for those people. They might cut back pay or other benefits for those people to save money, but will largely keep them around in anticipation of that activity coming back.
- Right. You don't get that sense, at least right now, that mass layoff announcement is coming. To your point, it was only-- First, we don't like to see anybody losing their jobs, first of all. But it is only 200 Walmart workers. It's not 2,000. It's not 20,000. So if we're looking for positives in all this, maybe that's it.
- And we are seeing some cuts, of course, in the tech industry. But many of those big, big tech firms--
- Well, they were out to lunch.
- Well, they're also just slowing hiring a lot.
- I mean, they were planning their businesses as if GDP was going to grow 7% for the next 20 years. I mean, Robin Hood, what planet were they living on?
- Robin Hood is--
- What a disaster. Right there with Clorox.
- -- is it's own situation.
- Yeah.
- All right. Man--
- I'm very upset about Clorox.
- --two Clorox mentions already.
